ACCBANK, the Dutch-owned institution, is cutting 200 jobs – almost one-third of its workforce – and closing 16 of its 25 branches, blaming the sharp deterioration in the economy and property market, and the global financial crisis.
The bank’s chief executive, Rob Hartog, said that these factors had “severely impacted” the bank’s financial performance last year.
The bank made an after-tax loss of €244 million in 2008, compared with a profit of €39.9 million the previous year, after an almost fivefold increase in bad debts, primarily on loans to the property and construction sector.
The bank, a lender to small business and the agri sector, has a significant exposure to property across its €6.5 billion loan book.
The bank said the results “necessitated swift action to manage the risks in ACCBank’s loan portfolio over the next 12 months”.
The bank said it planned to cut “payroll and non-payroll costs” by at least 30 per cent per annum.
The changes reflected the expectation that this year and next would “continue to be difficult” and the need to prioritise the bank’s resources, said Mr Hartog.
“We are in volatile times with global financial systems in a period of radical change, and the broader Irish economy unlikely to recover for at least another two years,” he said in a statement.
The job losses among the bank’s 660 employees will be made in the bank’s head office in Dublin and across the branch network. Employees will start leaving from July. The bank will restructure other jobs at the bank and introduce a severance package for staff.
Mr Hartog said the decision to introduce the changes had been “a very difficult one to make”.
ACC will work with trade unions and employee representatives to implement the changes “over the next few weeks”, he said.
A spokeswoman for the bank said Mr Hartog declined to answer questions or comment further beyond the bank’s statement.
The bank has held talks with trade unions Siptu and Unite for several weeks over the job losses and branch closures. Siptu, which represents 300 staff at the bank, expressed concern over the move.
“Cutting around one-third of the workforce will have an extremely severe effect on everyone, including the workloads of those remaining,” said Siptu branch organiser Owen Reidy.
He said he would meet management again “in the near future” to start talks in a bid “to minimise the number of redundancies and to ensure that any redundancies that do take place are voluntary”.
ACC will close branches in Athlone, Ballina, Castlebar, Cavan, Clonmel, Ennis, Dungarvan, Letterkenny, Monaghan, Navan, Nenagh, Roscommon, Tralee, Tuam, Tullamore and Wexford.
The 16 branches will close from October of this year to April 2010.
The bank’s remaining nine “business centres” in Cork, Dublin, Drogheda, Galway, Kilkenny, Limerick, Mullingar, Sligo and Waterford will remain open.
ACC said it would continue to focus on the agricultural sector. The bank’s parent company, Rabobank, is a heavy lender to the food, agri-business and renewable energy sectors.
The loan book at ACC shrank in 2008 to €6.5 billion from €6.75 billion the previous year, while customer deposits dropped to €1.4 billion from €1.8 billion. Rabobank invested additional capital of €175 million in ACC last December.
€244m
The after tax loss posted for 2008, compared with a profit of €39.9 million the previous year
30%
The percentage the bank said it planned to cut 'payroll and non-payroll costs' per annum
25
The current number of branches in the ACCbank network
The branches to close
Athlone, Ballina, Castlebar, Cavan, Clonmel,
Ennis, Dungarvan, Letterkenny, Monaghan, Navan, Nenagh, Roscommon, Tralee, Tuam, Tullamore and Wexford.
The 16 branches will close from October of this year to April 2010
