FEARS are growing that Ireland could see banking fees and charges rise in a return to an uncompetitive "duopoly" after Danish lender Danske Bank became the second institution in a week to pull the plug on its Irish operations.
It follows the decision by ACC Bank's Dutch parent to hand back its banking licence and ultimately shut up shop.
Last Friday ACC Bank said it would close all of its remaining branches and hand back its banking licence with the loss of 180 jobs out of a workforce of 470.
Meanwhile, unions and business leaders have expressed disappointment at the departure of Danske Bank.
Analysts said it was good news for AIB and Bank of Ireland but only because it boosts their chances of returning to profit by removing competition.
At Danske Bank 150 of its remaining 350 staff in Ireland are at risk of losing their jobs after the bank's Danish parent announced plans to pull out of most of its remaining banking activities here.
New lending is being cut off straight away and the bank's 100,000 retail customers and 10,000 small and medium-sized business customers will have to find new banks next year as Danske withdraws from the market here.
However the decision to pull out comes as no surprise. Danske has already shut down its network of bank branches. Staff numbers are already down from a peak of 670, as the bank gradually cut back more and more of its operations here.
The bank will continue to serve big corporate customers here, and will stay involved in high finance including in its role as a lender to the Irish Government.
The bank will also maintain a presence here as it continues to collect older loans, including mortgages into the future.
Its Northern bank unit, the third biggest lender in Northern Ireland is not affected.
The departure follows the appointment of Thomas Borgen as Danske Bank's global chief executive in September, and after a report by the Danish finance ministry that said losses resulting from the bank's expansion into Ireland had put the financial system in its home country at risk.
Danske Bank paid around €1.4bn in 2004 to buy National Irish Bank just in time to get caught up in the worst period of the lending bubble here.
Losses in Ireland have cost the bank between DKK 25bn (€3.4bn) and DKK 30bn (€4bn) since 2007, Thomas Borgen told the Irish Independent.
Danske Bank's experience in Ireland had been "very difficult," he said.
However, he said the decision to pull out is not based on historic losses but on the bank's lack of future prospects here.
"We have tried to restructure our operations over the last four to five years... the economic environment (in Ireland) is still very challenging and we are not really able to make a decent return for our shareholders," said Mr Borgen.
Danske Bank shares rose 2pc following the news.
Banking analyst Ciaran Callaghan of Merrion Capital said it is good news for the so-called "pillar banks."
"From a domestic banking perspective, the exit of smaller foreign players strengthens the duopoly position of the large remaining players, further allowing them to reassert their dominance," he said.
But foreign-owned banks pulling out of Ireland highlights the challenges still facing the banking system, he said.
The chairman of the Small Firms Association AJ Noonan, who represents business owners, said the increasing dominance of AIB and Bank of Ireland is bad news for his members and for consumers.
"A duopoly by its nature charges more," he said.
He said there is a need, and an opportunity for a new lender to enter the market.
"It's disappointing that Danske Bank is moving to withdraw still further to the obvious detriment of its customers and its staff," the head of the Irish Banking Officials Association said in a statement.