Far from increasing competition in the Irish market the Scottish invaders have spread contagion around Ireland over the last decade. They are exiting a scorched earth, partly of their own creation.
Remember the arrival of the Bank of Scotland in 1999? They cut mortgages by one per cent. They were here to challenge Ireland's big banks. Behold Ireland's giant killers, the cartel breakers.
And so it seemed. Other banks reacted by cutting their own rates to match the Scots. A mortgage war broke out.
At the time most of us naively welcomed the invaders as saviours of the consumer. Here in the Sunday Independent we even awarded them the 'Business of the Year' award in 1999. Ouch.
What fools we were. We were hoodwinked.
We should have known. It did not take the Scots long to go native. They bought the State-owned ICC Bank and proved their commitment to the green flag by putting a hardline Irish republican, Phil Flynn, in charge as chairman. They joined employers' group Ibec, the useless insiders' club dominated by the big bankers. They even became part of the elite Irish Bankers Federation. The Bank of Scotland had arrived in Ireland.
Suddenly, after chairman Flynn had been linked to an embarrassing money laundering scandal, they gave him a payoff of €240,000 and nominated a successor. Enter Maurice Pratt, former head of the moribund Ibec, director of the dreaded Eircom and boss of the ailing C&C. An insider par excellence took the helm.
Maurice was still chairman of the jinxed Bank of Scotland last week when it announced the closure of 44 branches and the loss of 750 jobs. Maurice is one of the few chairmen to survive the Irish banking crisis. It is difficult to understand the reasons why he has held on to the job.
Maurice has presided over a disaster similar to the other Irish banks, but he is lucky. He is not part of the decrepit Irish bankers' club dependent on Brian Lenihan for survival. Maurice is dependent on his UK parent, HBOS, and its current owner, Lloyds Banking Group.
During Maurice's tenure in the chair, mortgage rates at Bank of Scotland's Halifax have risen to become the most expensive in Ireland. When Bank of Scotland hit the market in 1999 it was the cheapest. Gradually, as it established its presence here, rates crept up while the bank still lived on the low-cost reputation established as it sailed in from the highlands.
Indulged by Maurice and the board, CEO Mark Duffy loudly blew the bank's trumpet about new products, tracker mortgages and credit cards. In 2005, the bank bought 54 ESB shops for €120m. Maurice, Mark and HBOS had planted roots in Ireland.
The foreigners even sponsored the massively popular Late Late Show on RTE. They were becoming embedded.
As it insinuated itself into the Irish establishment -- while simultaneously making loud anti-establishment noises -- the Bank of Scotland was quietly catching the Irish property bug. Duffy and Pratt were not only over-extended on the retail side, they had gone gangbusters into Ireland's commercial property market.
We should have read the runes. Back in the UK, Maurice and Mark's owners at HBOS had gone bananas, over-lending on the property market. The contagion was in the family.
In March 2008, HBOS was even coupled with Anglo Irish Banks, branded by the Financial Times' Lex column as the two banks most vulnerable to a property collapse. The influential columnist's comments prompted a run on both banks' shares. An inquiry into dealings in HBOS shares in London was followed by a copycat into Anglo's in Dublin. The short selling in March 2008 ultimately ended with the nationalisation of Anglo and the UK state rescue of HBOS.
While HBOS had gone overboard on property in the UK, its subsidiary here was joining the party late in the day, bitten by a bug to a depth that would have made Sean FitzPatrick blush.
Seized with the zeal of a late convert, Duffy started to make up for lost time in the development game. Aping his UK parent, he left no opportunity unexplored.
Right at the top of the property boom, he closed enormous deals with the now deeply indebted Bernard McNamara when he funded much of the €288m Burlington Hotel purchase.
He even tied up €1bn with the troubled developer Liam Carroll on the south Dublin Cherrywood site.
The bank that had invaded Ireland as the consumer's champion was now wooing greedy developers. By the end of 2007, Bank of Scotland (Ireland) had bet more than half its Irish loan book on the flagging property frenzy.
Its lending for property stood at €16bn, nearly 11 times its 2001 exposure.
In February 2009, Duffy, like the other battered bankers, retired with an undisclosed lump sum. Last week he was no longer in position to explain to the desolate 750 workers his decision to buy the ESB shops, to promote the Halifax products or the ill-fated plunge into property. Nor did he need to account for his stewardship to his bosses. The bird had flown with a few bob.
Pratt, like most bank board members, still sits on his perch drawing a six-figure sum. Both men have been well-rewarded for failure. A familiar tale.
Bank of Scotland's venture into Ireland has been bad for the bank but worse for Ireland. How did it go so wrong?
An uneasy thought keeps recurring: did ruthless overseas banks spot Ireland as a soft target back in 1999? Did they realise that just across the sea lay this island of milk and honey without banking regulation? Even better, the island nursed a cartel, constantly milking its citizens.
Far from bringing competition to the market, the invaders were merely intent on joining in the pillage of Ireland's innocents.
At the time, Irish bankers' major sin was overcharging, unchecked and undiscovered by a sleepy regulator. The lack of regulation offered rich pickings for a few extra players. Bank of Scotland seized the opportunity, initially posing as a cartel cracker.
Last week the Bank of Scotland was keen to insist that its commercial property disasters were a completely separate catastrophe from its flop in the mortgage market.
On Tuesday, Maurice Pratt protested that the review ending in the loss of so many jobs was a local one. Insiders pooh-poohed the suggestion that this was a diktat from its new parent, Lloyds.
Ahem. At the same press conference announcing the retreat, Maurice Pratt was flanked by Lloyds' top dog Mike Wooderson.
The assault on the mortgage market is over. The Bank of Scotland (Ireland) was a willing player in the property madness. It played its part in bringing Ireland to its knees.
'The Bankers: How The Banks Brought Ireland to its Knees' by Shane Ross is pubished by Penguin Books