Business Irish

Wednesday 28 June 2017

Thousands of bank jobs to go but BoI's Boucher to stay his hand

AIB to cut 2,000 staff while its major rival looks to expansion

Emmet Oliver and Siobhan Creaton

MORE than 3,000 jobs will be lost in the Irish banks over the next few weeks, but Bank of Ireland is not expected to announce any additional job cuts this year.

AIB today announced the slashing of up to 2,000 jobs, but the other big bank will not announce any cuts and may not slim down its workforce at all this year.

It has existing plans to cut 750 jobs out of certain "targeted businesses'' and about half of this number have come forward for its voluntary package.

Anglo Irish Bank and Irish Nationwide will together shed 300 jobs when they merge, but the redundancies from putting those two lenders together are expected to be far larger. Job losses at Irish Life & Permanent are also on the way.

Bank of Ireland, however, is expected to indicate on Thursday that it hopes to hold and expand its market share in the Irish retail market, thereby reducing the need for immediate cost cuts.

Additional equity

However, with private equity and sovereign wealth funds to be tapped for additional equity, chief executive Richie Boucher will come under pressure ultimately to shed jobs in the same manner as AIB.

AIB's preliminary results for 2010, out today, put cost cutting at the centre of its future strategy as the Government takes a stake in excess of 90pc in the bank.

With plans to offload €19bn of assets, the bank has been told by the Department of Finance it can go ahead with the reduction in staff numbers, initially on a voluntary basis.

Some 2,000 officials have already left the bank since 2008 as AIB stopped replacing contract and retiring staff.

With the bank also disposing of its stake in the US M&T Bank and its Polish business, Bank Zachodni, employees who are working in roles that provide services and support are most vulnerable to job cuts.

Uncertainty over whether the bank will maintain its Northern Ireland and UK operations is also a concern for staff based there while the Government's decision to merge the EBS Building Society with the bank is also likely to trigger job losses, particularly at AIB and EBS head office where they may be scope to reduce the number of officials employed.

IBOA

The Irish Bank Officials Association (IBOA), which represents staff at AIB, has had no direct engagement with Mr Hodgkinson about redundancies. Yesterday, a spokesman said it expected any proposal that was made would be subject to negotiation with the union.

The size of the job cuts will also depend on the extent to which the bank sells off further subsidiaries. This could mean that some officials employed in those areas could transfer to a new owner, taking them off AIB's payroll without making them redundant.

The bank has previously offered staff up to eight weeks' salary per year of service in other redundancy schemes. This was generous and any new deal may not be as attractive as AIB is insolvent and needs fresh money from the Government. They could be offered as little as statutory redundancy -- around two weeks' pay per year of service.

Irish Independent

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