Lloyds Banking Group BoSI statement in full
Lloyds Banking Group announces results of strategic review of its Irish business
Lloyds Banking Group plc (the Group) has announced the results of a strategic review of Bank of Scotland (Ireland) Limited (BoSI).
The review concluded that there was little opportunity for scalable growth in the future and it is therefore now intended that the business currently carried on by BoSI will transfer, pursuant to a court process, to Bank of Scotland plc. This announcement follows the decision earlier this year to close the retail and intermediary business of BoSI in the Republic of Ireland. These proposals are subject to the necessary approvals.
The transfer of the BoSI business, including all of the strategic management and decision making activities relating to BoSI, will allow Bank of Scotland plc to utilise its extensive operational and management capability (including general and credit management, oversight and control) within the UK in relation to the Irish portfolio. This will aid the efficient rundown of the existing lending portfolio.
In order to retain local administrative capability, historic knowledge and continuity of customer relationships, it is proposed that Bank of Scotland plc would enter into an agreement with an independent service company which would perform various administrative functions relating to the BoSI banking business. Under this proposal the majority of BoSI employees would transfer via Transfer of Undertakings (Protection of Employment) Regulations (TUPE) to the service company.
The Group’s other business operations in Ireland and Northern Ireland – including its Halifax branch network and customers service centre in Northern Ireland and its insurance operation in Shannon – are unaffected by this announcement.
Summary of the current proposals
* Subject to court and other approvals the BoSI business would transfer to Bank of Scotland plc in the UK on 31 December 2010.
* BoSI would cease to operate as a licensed bank on 31 December 2010.
* Bank of Scotland plc would utilise its extensive operational and management capability within the UK in relation to the Irish portfolio.
* An independent service company would provide administrative support in respect of the business being transferred.
* The majority of BoSI employees would transfer via TUPE to the independent service company.
* There would be no operational change for BoSI customers as they would continue to repay their loans until they reach maturity or they are paid down in full.
* The Group will work with depositors at BoSI to ensure a smooth transition of their banking arrangements.
Managing change for employees
BoSI is committed to working through these proposed changes with employees carefully and sensitively. 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.
Impact on customers
Under this proposal it is envisaged that lending customers of BoSI would see minimal change in how their existing accounts are managed. It is intended that customers’ loan facilities would transfer to Bank of Scotland plc where customers would continue to repay their loans until they reach maturity or when they are paid down in full. The Group will work with depositors at BoSI to ensure a smooth transition of their banking arrangements. However, BoSI will cease to provide Working Capital and Wealth Management services by the end of the year.
Customers will be contacted in the coming weeks to advise them how these changes would affect them.