Irish Life & Permanent plans to merge TSB Bank's network with Irish Permanent's retail banking operations if its bid is successful in a move that may result in up to 30 branch closures.
The life assurance and banking group has submitted a bid believed to value the bank at £330 million (€419 million) which is now being examined by TSB's advisers Pricewaterhouse Coopers and will then be evaluated by its board. The detailed bid outlines how it envisages merging TSB within the Irish Life & Permanent group and the necessary structures that would be created.
It is understood to propose the integration of TSB and Irish Permanent's businesses. The enlarged group is expected to be headed by TSB Bank chief executive, Mr Harry Lorton. TSB has 80 branches with a high concentration in the Cork, Waterford, Limerick and Dublin areas. Irish Permanent also has around 80 branches but is currently implementing a €35 million rationalisation plan that involves the closure of 10 branches in Dublin.
Another seven around the Republic will be converted to agencies and other measures are being implemented to improve efficiency. This plan is being overseen by Irish Permanent chief executive, Mr Billy Kane, who will be involved in integrating the two businesses if the deal is closed. He has announced his intention to leave the company in December 2001.
The TSB has sought a guarantee that there will be no compulsory redundancies as a result of the deal.
Irish Life & Permanent is also understood to have indicated that it would accommodate members of the TSB's board of directors at its boardroom table. These details will have to be thrashed out before any recommendation can be given to the Minister for Finance Mr McCreevy to approve the sale. The Department of Finance confirmed yesterday that legislation to allow a sale was almost complete and required a proposal from the TSB on the bid to be finalised. Such a decision is expected before Christmas.
