180 jobs to go as ACC closes branches, hands back banking licence
Published 26/10/2013 | 01:00
The banking collapse has claimed another victim with the decision of ACC Bank to hand back its banking licence, close its nine branches and lay off 180 workers.
The bank, which first opened in 1927, is withdrawing day-to-day bank services such as deposit and current accounts, but it will continue to operate its profitable agriculture loan book.
All deposit funds will be repaid in full, the subsidiary of the Dutch Rabobank pledged.
The bank said it plans to focus solely on debt recovery. It currently has 470 staff.
Next year the bank will close all its business centres and will give up its banking licence.
It said it would continue to be a regulated entity and would support its customers in the agriculture sector.
Online savings operation RaboDirect and business bank Rabobank Ireland will operate as normal with "no impact on customers or businesses".
ACC country manager Kevin Knightly said the move was driven by the fact the bank had been hit with "significant losses" since 2008 due to the property bust. Among its borrowers are developer-turned-TD Mick Wallace, struck-off solicitor Michael Lynn and developer Liam Carroll.
"While costs have been cut significantly, including a substantial restructuring programme in 2009, we are heading towards a situation where, without intervention, our costs will exceed our income during 2014," Mr Knightly said. "This is an unsustainable position and we need to take action now."
The bank lost €219m last year and was forced to put aside €1.2bn to cover bad debt provisioning. Its total loan book is €4bn made up of loans to the property, business and farming sectors.
ACC has €110m in deposits in 5,000 accounts, and €75m in overdrafts.
The bank said it would begin a voluntary-led severance programme, which will see job cuts of up to 180.
ACC Bank is also exploring the possibility of outsourcing a small portion of its loan book, excluding agricultural loans.
Capita has been selected as the preferred service provider.
"ACC Bank has remained at the forefront of loan recovery activity in the Irish market," Mr Knightly said.
"We will continue with our approach to loan recovery but do not need to be a fully licensed bank for this purpose."
The bank said it would be writing to all customers.
Trade unions SIPTU and UNITE said they would press the Government to take ACC Bank back into state ownership and are looking for a meeting with the Minister for Finance.
SIPTU finance sector organiser Adrian Kane said that the union's job was to seek to save jobs and there was provision of a state investment bank in the Programme for Government.
"A strategic investment fund has been created. We would see the infrastructure of an investment bank being there in ACC. And we want to explore every possibility we can in relation to that course of action and to see if that would be feasible," he told RTE.
Charlie Weston and Colm Kelpie
Irish IndependentFollow @Indobusiness