More banking pain on the way
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Wednesday February 10 2010
THE malign influence of the banking collapse has engulfed the staff of Bank of Scotland Ireland (BoSI) where there are to be massive lay-offs. There will be many compulsory redundancies as the bank sheds 750 jobs from its retail network. Some 850 people are to continue working in its corporate and commercial banking sectors.
It was inevitable that more bank jobs would fall victim to the recession, just as hundreds of private companies have been forced to let people go, or have been driven out of business.
Last year, Ulster Bank revealed plans for lay-offs on a similar scale to this, but the sheer number of the BoSI staff affected, together with the blunt nature of the announcement, are quite shocking. The bank's chief executive said that its Halifax retail network, a "fledgling operation", had been "side-swiped" by the economic downturn. Can the Government do anything?
The bank is not included in the NAMA operation and, since January last year, is controlled by Lloyds Banking Group in the UK. It was one of the main lenders to property developers during the boom days.
Union representatives have urged the Government to consider setting up a third banking force. They say the jobs could be saved if BoSI were merged with Permanent TSB, Irish Nationwide and EBS.
However, it has been pointed out that if the Government were to underwrite such a merger, it would involve a state guarantee to a British-owned company. The implications are difficult to assess. Certainly the banking landscape would immediately assume a very different aspect.
As it stands, a bank which made hay at the height of the property boom is retrenching as the Irish economic downturn makes part of its operation here unprofitable. Inevitably, other banks will lose jobs too, before business improves.
There is some cruel irony in the fact that even as a British bank was announcing the closure of a large part of its Irish operation, at the cost of hundreds of jobs, the Governor of the Central Bank was urging commercial banks to turn their attention back to lending to small and medium-sized businesses.
There will be more cruel experiences before the country gets the banking sector that it deserves and that it needs if it is to recover.
Irish Independent
