The announcement that the EBS is closing seven Dublin branches is the latest in a long list of closures by financial institutions reducing their presence on the high street. Increased competition in the Irish banking sector and a desire to reduce overheads is prompting the cut in the number of outlets.
First Active has closed a third of its branch network, 25 of 76 branches, since last year. Irish Permanent will close 10 Dublin branches and a further seven are to be converted to agencies or franchise operations. The EBS announced it is initially to shut down seven branches while looking at the option of franchising others. Streamlining, pressure to reduce operating costs, rationalisation and branch amalgamations demanded by increased competition in the Irish banking market are the main reasons behind this trend.
The main players in the banking industry, AIB, Bank of Ireland and Ulster Bank have remained relatively stable - while a number of branches have been closed in the last two years, new branches have opened in demographically expanding centres. Ulster Bank has seen growth of more than 30 per cent since the early 1990s, according to spokesman Dennis Aiken.
Market competition has intensified with the recent arrival of Bank of Scotland and the certainty that more overseas providers will be pitching for a share of the Irish market. Recent mergers, rationalisation and closures would appear to sound calling time on the smaller players in the Irish market.
Despite this the credit unions are showing exceptionally strong growth and while building societies have been closing their doors to customers, credit unions across Ireland are opening bigger and newer doors as customer numbers expand.
Credit unions in urban and rural areas of Ireland have seen customer/membership numbers double, and, in some cases, quadruple in the last few years. Where once credit unions were housed in prefab buildings or part-time premises and staffed predominantly by volunteers, they are now becoming a significant landmark in communities.
The new Coill Dubh & District Credit Union in the Bord na Mona village of Timahoe, Co Laois, completed last year, received a special award in the Architectural Association of Ireland's buildings of the year Awards last week. A drive through any community, be it urban Dublin or a rural midlands village, will demonstrate the increase in credit union buildings.
The EBS closed seven Dublin branches two weeks ago, including units in prime locations on Grafton Street, Liffey Street, Castleknock and Donnybrook, and is looking to franchise its branch in the Blanchardstown shopping centre. ACC is also understood to be reconsidering its location in the centre, which is well represented by all the major financial institutions, including AIB and Bank of Ireland.
The Clonsilla Credit Union has been anchored in the Blanchardstown Centre since mid-March 1998 and has experienced growth of more than 55 per cent in those two years.
"We were located in a small bungalow in the Clonsilla area prior to our move to this centre, and although the move was seen as a high-risk one for us, due to the high rent commanded by this retail centre, we are now growing at a high rate. We have become more visibly exposed and are reaching a wider audience," said Arthur Briscoe, manager of Clonsilla Credit Union. In two years, staff numbers have grown from six to 11 and there is now £5.9 million on its books.
The Tipperary Credit Union has a modern head office in Tipperary town and six branch offices within a 15-mile radius. "Many people do not realise how big Tipperary Credit Union has become. Growth in the credit union has been phenomenal, especially over the last 10 years. Today Tipperary Credit Union has become a major financial co-operative, worth nearly £30 million," said chief executive Pat Shanahan.
The Cois Sionna Credit Union in Limerick is also a good example of this strong growth. The head office of this network is on Church Street, Askeaton, Co Limerick, with a further six suboffices within a 14-mile radius. In a high-growth area close to Limerick city, the Cois Sionna Credit Union has seen its customer loans base increase by 30 per cent in the last year, from £9.5 million to £12.5 million.
"In the last few years the board has purchased a site and built a premises at Pallaskenry, bought and renovated a premises at Kildimo and extended and renovated the premises on Main Street, Foynes. There are additional branch premises at Shan agolden, Cappagh and Kilcoran," said Fintan Ryan, manager of Cois Sionna. The Bank of Ireland has a branch in Askeaton and AIB is located in Foynes.
Rural areas of Ireland have seen a number of closures of financial institutions in recent years, mainly sub-offices or part-time branches, where the changing demographics of communities no longer justify the existence of major financial institutions.
Urban regions, designated high-growth areas, have become the focus for new branch expansion by the leading institutions.
