THE LARGEST building society in the UK, Nationwide, is planning to launch savings products in the Irish market next spring and may subsequently sell more retail products in the Republic.
The building society said it was "putting plans in place to operate" in the Republic. It already has 14 retail branches in Northern Ireland. Nationwide, the second-largest player in the UK savings and mortgage market with assets of £180 billion (€228 billion), is planning to offer savings products by post, phone and online initially.
It plans to launch an instant access deposit account and a fixed-rate bond paying monthly or annual interest and with limited access to savings in the bond.
The society said it would "further diversify its geographical operations and funding opportunities" by expanding into Ireland. A spokesman for Nationwide said the move would give it access to European Central Bank funding.
Nationwide has approached the Financial Services Authority in the UK and the Irish Financial Services Regulatory Authority seeking approval for its Irish business, but has not yet lodged a formal application with the Irish regulator.
Nationwide's spokesman said it had not yet decided on its rates, but added they would be "competitive". The society will hire 12-15 staff initially for its Irish office but plans eventually to double this.
He said the society had "no immediate plans to offer mortgages but we may launch a more wide-ranging retail product line at some stage in the future".
The spokesman said Nationwide had not yet decided on a name for its business in the Republic but it would be different from Irish Nationwide Building Society, which also offers savings products and has no connection with the UK society: "We would recognise the need for there to be a clear distinction between the two operations."
International banks and building societies have targeted the Irish market to grow deposits and source alternative funding as the wholesale markets remain expensive due to the credit crisis.
South African bank Investec and Leeds Building Society have launched competitive savings products in the Republic, while Irish institutions have raised their savings and fixed-term rates to attract new deposits.
Irish deposits increased by 3 per cent, or €2.5 billion, to €83.7 billion in the 12 months to June, according to Central Bank figures.
Fixed-term deposits, which offer higher rates than current and overnight/demand accounts, rose from €26.6 billion to €34 billion. Some €39 billion was still in demand accounts, paying an average rate of just 1.52 per cent.
Derek Keogh, head of personal savings at Anglo Irish Bank, said: "Money is moving from demand to fixed-term accounts, but there is still a lot more out there that has not been moved. Ireland has an unusually high level of cash in demand and overnight accounts."
Rating agency Fitch affirmed Irish Life Permanent on Friday, saying it had "moderate liquidity, good profitability, low risks and satisfactory capital". It affirmed Irish Life's outlook as stable.
