BANK OF Ireland is closing down The Mortgage Store, its chain of eight high-street mortgage shops, in a further sign of the downturn in the mortgage market.

The chain was run by the Bank of Ireland-owned mortgage lender, ICS Building Society, which also sells loans through brokers. The chain's 24 staff will be moved to other parts of the bank.

The bank decided to close the business as it was already selling home loans through its 276 branches and through brokers via ICS.

The chain accounts for just 1 per cent of the bank's new mortgages. This amounted to loans worth about €60 million last year.

The bank has six stores in Dublin, including outlets on Grafton Street and in the IFSC, in addition to branches in Waterford and Cork. The chain started with its Grafton Street store in 1989.

The stores will close on October 31st and existing mortgages will remain with ICS.

The bank said the chain was a niche retail mortgage business and was constrained by its small distribution scale. It added that further investment in the chain would not be justifiable in the context of the significant "reach" that Bank of Ireland had through its other mortgage channels, namely the ICS broker and Bank of Ireland branch channels.

Gerry Prizeman, head of ICS Mortgages, said the stores were becoming less relevant. Given that the chain accounted for just 1 per cent of new mortgages, it made sound commercial sense that efforts were focused on its two remaining key channels where it had both scale and distribution, he said.

The mortgage market has declined significantly due to the increased cost of borrowing as a result of the credit crunch and lower demand among borrowers.

Mortgage lending grew in June at its slowest rate in almost 17 years, while the value of new mortgages fell by 19.7 per cent in the first three months of the year.

The decision to close The Mortgage Store comes a day after US lender GE Money said it was cutting 85 of its 450 staff due to the financial downturn.

Affected staff are being offered other jobs in the company or a redundancy package. The lender will also cease offering personal and small commercial loans, but will continue selling loan protection insurance and will still lend to large multinationals with European operations.

It will provide car loans through motor dealers and and a reduced number of sub-prime mortgages through brokers.