2005 promises to be another interesting year in Irish banking with hopes that fresh competition will inject greater choice and better value for Irish consumers.
In the spring, Denmark's biggest financial institution, Danske Bank, will take over the National Irish Bank and Northern Bank brands from National Australia Bank.
The bank, which enjoys a good reputation for customer services has said it intends to offer Irish consumers good value on its products to win a significant share of the banking market. It has ambitious plans to capture about 10 per cent of the market and many of its competitors are taking its arrival in Ireland seriously.
Ireland's biggest financial institution, AIB, will be hoping not to attract so many negative headlines, although it rarely seems to be too far away from a controversy.
The bank will be relieved that the Irish Financial Services Regulatory Authority's investigation into customer overcharging and the use of offshore accounts by some of its former senior executives that has left them with tax issues, has ended.
A disciplinary process is underway at the bank and investors will be keeping a weather eye on the comings and goings at Bankcentre, although few expect to see any senior AIB figures leave the organisation.
A process to select a chief executive designate to succeed Mr Michael Buckley, has got underway and some market sources expect the post could be filled before the summer.
For all its troubles in 2004, AIB has signalled that its business has remained unaffected and that it will bring in a more than 10 per cent increase in profits in February.
This will be another strong performance for the bank and will keep investors happy.
Its main rival, Bank of Ireland, has endured its own problems. Last year, it lost its chief executive, Mr Mike Soden, and Mr Brian Goggin, the insider who lost out to Mr Soden two years earlier was put in charge.
He has been setting out his stall in terms of his vision for the organisation and has begun to tackle its UK businesses that could result in the disposal of some of its assets in that market.
Bank of Ireland's Asset Management business is also a headache. This fund management arm has long been viewed as the jewel in the bank's crown and one of the chief attractions as a potential takeover target.
In 2004, it began to lose significant chunks of business because of poor performance of a number of funds and Mr Goggin will be anxious to steady the ship and to prevent any further erosion of the business. He is also set to wield the axe to save costs and could announce a voluntary redundancy package as part of that initiative.
2005 may be the year that Royal Bank of Scotland begins to seriously flex its muscles in the Irish market by aggressively expanding its Ulster Bank and First Active franchises.
Its Scottish rival, Halifax Bank of Scotland, which owns Bank of Scotland Ireland, has to go back to the drawing board and figure out how it will expand into retail banking here as it has said it wants to. For all its talk, it needs a branch network to quickly build a meaningful business here.
Irish Life and Permanent may come into its sights in the future and would offer it a retail branch network as well as a large life assurance business.
It's all change at Anglo Irish Bank this year as Mr David Drumm takes over the reins from Mr Seán FitzPatrick. He is largely an unknown quantity and emerged as the surprise choice for the top job.
He has reassured investors that they can expect more of the same from him as he is embedded in the Anglo culture. He has also said he will double the bank's profits over the next five years.
The Irish building societies are still awaiting changes in legislation that could alter their ownership structures. The Minister for the Environment, Mr Roche, had said the new legislation would be in place before the end of 2004 but there is no sign of it.
The changes would allow Irish Nationwide to pursue its goal to shed its mutual status and to sell the business. In the process, its members would stand to reap windfall payments.
The EBS is also keen for the legislative changes. It has no intention of shedding its mutual status and is hoping to clinch a deal with the Dutch Rabobank that would swell its resources. Those discussions have waxed and waned and could unravel totally if the legislation were to be delayed for another couple of years.
At the end of 2004, the Competition Authority confirmed that the Irish banking market wasn't as competitive as it could be and was not operating in the best interests of its customers. It focused specifically on current accounts and on lending to the small business sector.
New initiatives to make it easier for bank customers to switch their business to other financial institutions are set to be adopted in February and should hand consumers greater flexibility and improved services. It will be interesting to watch these developments.
