Bank of Scotland (Ireland) is to shut down
Published 19/08/2010 | 11:42
Bank of Scotland (Ireland) is to shut down, it confirmed today.
The bank, which traded as Halifax on the high street in the Republic of Ireland, is one of the biggest casualties of the recession after laying off 750 workers earlier this year.
It is a division of UK finance giant Lloyds and management announced plans in February to close all its 44 Halifax branches after only four years trading.
In a statement, the Lloyds Banking Group said there was little opportunity for Bank of Scotland (Ireland) (BoSI) to enjoy scalable growth in the future and business would be transferred to Bank of Scotland.
The move will see the balance sheet and loan book effectively placed on bank books outside Ireland.
It is understood 830 staff are still employed by BoSI.
The bank's bosses plan to retain the majority of existing staff by transferring employees to an independent company to oversee administration of its remaining Irish business.
Lloyds said: "This will aid the efficient rundown of the existing lending portfolio."
It said its other business operations in the Irish Republic, an insurance operation in Shannon, and the Halifax branch network and customer service centre in Northern Ireland are unaffected.
The bank said it was committed to working with employees carefully and sensitively as the wind-down takes hold.
BoSI said: "All employees were briefed by management this morning. The union, Unite, has been briefed and BoSI has commenced a process of consultation.
"These proposals will directly impact a number of roles. However, the group expects to minimise this impact with redeployment."
BoSI has staff in its St Stephen's Green head office in Dublin and in regional offices in Belfast, Cork, Galway, Limerick and Waterford.
Ireland's Central Bank and Financial Regulator said BoSI must ensure customers' rights are protected and they are treated honestly and fairly during the closure.
The watchdog said customers should be informed of how the changes will affect them from the end of September.
"The implications will vary depending on the type of account or product customers may hold and the Central Bank and Financial Regulator would recommend that customers read the details very carefully," it said.
The Unite trade union said staff were in shock at the announcement.
The company will make 36 compulsory redundancies and hopes that hundreds of workers will be retained for at least eight years as its loan book expires.
Brian Gallagher, Unite regional organiser, said job security has been seriously compromised by long term winding down of the Irish operation.
"There was so much hope when BoSI was established," he said.
"So many promises that persuaded people to come on board and lay the foundation for a long career."
"Those promises now lie like dust and the future for 800 staff is clouded by uncertainty."
Unite claimed Lloyds was looking at the future of BoSI as a balance sheet exercise but warned the impact on workers was devastating.
"The bank, one of the largest financial institutions in Europe, has moral, legal, personal and financial obligations towards its loyal staff in Ireland," Mr Gallagher said.
"The implications of today's announcement for our members and their careers are massive, and Unite will consult widely with staff in the coming days before we go into discussion with management."