NATIONAL IRISH Bank (NIB) is cutting 150 jobs, almost a quarter of its 634-strong workforce, and closing 25 of the bank’s 58 branches, citing the continuing recession and “sweeping changes” in the financial services industry.
The Danish-owned bank said the restructuring plan, which involves the closure of 43 per cent of its branch network, would begin next year and be completed on “a phased basis” by mid-2011.
“The banking sector in Ireland is on life-support,” the bank said in a statement. “Banks have to react by reducing costs and amending their business models. We are taking these actions to ensure we have a long-term future, a healthy future.”
Andrew Healy, chief executive of NIB, said the bank’s restructuring plan would ensure the future of most of the bank’s jobs.
“As business levels fall, it was inevitable that we had to look at our cost base,” he said.
NIB had reduced costs by 8 per cent this year, said Mr Healy, but needed to cut overheads further to safeguard the bank for the future.
The restructuring would not reflect any changes in the bank’s lending policies, said Mr Healy.
The changes were “evidence” of the long-term commitment of the bank’s parent company, Danske, to the future of its Irish bank, he said. “These steps are to secure a healthy foundation,” he said.
Branch closures would be focused on rural locations covering smaller population areas. Branches in larger towns and cities would be retained, he said.
NIB is closing six branches in Donegal, five in Dublin, four in Cavan and one in each of the following counties: Cork, Galway, Roscommon, Meath, Longford, Leitrim, Mayo, Tipperary, Meath and Kerry. The bank will give customers three months’ notice of the closure of their local branch.
Some 100 jobs would be cut from branches through a voluntary redundancy programme and the remainder from other areas of the bank, including its head office in Dublin and its business banking divisions, said Mr Healy.
The bank is offering staff six weeks’ pay for every year of service, capped at two years’ pay.
Larry Broderick, the general secretary of the Irish Bank Officials’ Association (IBOA), expressed his shock at the bank’s plans, saying it would seek a meeting with the Minister for Enterprise, Trade and Employment and Danske’s chief executive to discuss the issue.
“At a time when the Government is talking about the need for greater competition in the banking industry in this country, this announcement will only serve to reduce competition and impact on customers into the future,” said Mr Broderick.
The IBOA will meet NIB management tomorrow. Mr Broderick said there would be no agreement with the bank until it ensured any changes were achieved by agreement and that voluntary severance was “in line with industry norms”.
