NIB to close 40pc of its branches and revamp by December
NATIONAL Irish Bank now plans to complete its major restructuring by December -- including the closure of 40pc of branch network -- six months ahead of schedule.
Staff at the Danish-owned bank voted in favour last month of its plans to cut 25 branches and slash 150 of its 630-strong workforce.
This followed intense talks in recent months between management and finance union IBOA, which led to an improved severance package and guarantee of job security for remaining employees up to the end of 2012.
It was originally envisaged that the overhaul would take 18 months to complete.
However, Kevin Gallen, NIB deputy chief executive, has told the Irish Independent that closures will start at the end of this month and increase as the year progresses.
He said it was now hoped the process would be completed by the end of this year.
"We want to decrease the period of uncertainty for staff and achieve the benefits of the programme as early as possible," he said.
NIB booked a €16m restructuring charge last year. However, Mr Gallen declined to say what the overall cost of the plan would come to. It is likely that the majority of the related costs will be booked in this year's accounts.
Of the 25 branches NIB plans to close, 15 are actually owned by the bank.
Mr Gallen said the aim was to sell these over time. Peter Strarrup, head of Copenhagen-based Danske Bank, conceded early last month that he overpaid for NIB five years ago, as the Irish bank unveiled a €661m pre-tax loss for 2009.
The group's bad loan provisions more than trebled during the year to €704m.
Mr Straarup led the €1.4bn purchase of NIB and sister lender Northern Bank in 2005.
NIB is also setting up a new telephone banking service in Dublin that will focus on approving overdraft facilities and personal loans.
"We hope to have this new service in place by the middle of the year," Mr Gallen said.