Friday 23 February 2018

Bank boss signals major job losses are on the cards

Joe Brennan

THE new AIB boss Colm Doherty yesterday gave the clearest signal yet that he was planning to announce massive job cuts at the bank over the coming months.

Speculation in banking circles suggests that the group could end up axing between 1,000 and 2,000 positions.

It comes as another blow to bank workers, after Postbank announced last Friday that up to 150 of its staff were likely to lose their jobs -- and just weeks after Halifax-Bank of Scotland (Ireland) said 750 jobs were to go with the closure of its 44 retail branches.

Speaking after AIB reported record losses of more than €2.3bn, Mr Doherty said he was in discussions with the EU about the bank's restructuring plan but added "all options, ranging from early retirement to redundancies will have to be considered".

However, Mr Doherty said he would have to wait until Brussels ruled on the bank's restructuring plan before making an announcement on job losses.

Almost 10,000 of AIB's 25,000-strong global workforce are based in Ireland.

The group slashed its staff costs by 8pc to €1.1bn last year, as it decided not to replace 1,600 employees that left the group of their own accord.

But Mr Doherty has been preparing staff for redundancies since he took over as chief executive last November.

Within weeks of taking up the reins, he sent an email to staff warning that "tough decisions are needed to further reduce our costs" and that "we will consider all our options".

The two main banks have lost about 3,300 personnel between them over the last 14 months through natural attrition, as foreign-owned lenders led the charge in announcing redundancy schemes.

All told, around 6,600 jobs have been lost in the banking sector over this period.

Staff working at Postbank, the joint venture between An Post and French bank BNP Paribas, last week became the latest victims of the implosion of the sector as the lender said it would close down by the end of this year.

The move means that up to 150 of its 260 staff are likely to lose their jobs.

The past year has also seen Ulster Bank do away with its First Active brand at a cost of up to 1,000 jobs. Halifax-Bank of Scotland (Ireland) announced last month that it was closing its 44 retail branches, affecting 750 staff.


Permanent TSB and National Irish Bank are both laying off workers and shutting branches, while Anglo Irish Bank recently closed its applications box for 230 redundancies, with further to come over the next year.

Talks aimed at merging EBS Building Society and Irish Nationwide are also expected to lead to branch closures and job losses.

Meanwhile, AIB managed to almost halve its huge pension deficit in the space of the final six months of last year to €714m -- helped by a recovery in asset prices around the globe.

The IBOA finance union is currently balloting AIB staff on the group's plans to get members of its defined benefit scheme to start making contributions from next month. Defined benefit pensions entitle beneficiaries to a retirement income of two-thirds of final salary.

The bank aims to get working members of the scheme to contribute 4pc of their annual salary into the pension pot from April, rising to 5pc next year.

Irish Independent

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