Firms face squeeze as battered bank beats a retreat
Published 20/08/2010 | 05:00
THOUSANDS of businesses will have to find a new bank by the end of the year after Bank of Scotland (Ireland) announced it is pulling the plug on its remaining operations here.
The Lloyds TSB-owned bank, which has suffered heavy losses on commercial property in recent years, yesterday confirmed it would hand back its banking licence in December, putting more than 800 jobs at risk.
Some 750 jobs were lost when BoSI axed its Halifax retail network earlier in the year, but the bank had continued working with businesses.
Now those 12,000 businesses will have to find new banks by December 31, prompting outrage among their lobby groups.
Up to 5,000 companies which have their current accounts with BoSI will also be denied access to new working capital loans from today.
Around 36 BoSI jobs will be lost immediately, with the remainder of the staff transferred to a new company that will "administer" the bank's €32bn loan book.
Mark Fielding, head of business lobby group ISME, called on the Government to force bailed-out AIB and Bank of Ireland to take on struggling businesses that can no longer keep their accounts with BoSI.
"If you're a business and there isn't a bank that will take you, what are you supposed to do?" he asked.
REPORTS, ANALYSIS: PAGES 38, 39