Fear for jobs as Bank of Scotland about to make key Irish decision
Bank of Scotland (Ireland) (BoSI) is understood to be preparing a major announcement on its future in Ireland, prompting fresh fears about the security of its 1600-strong workforce.
The bank, which is owned by Lloyds banking group, had planned to announce a dramatic retrenchment last summer but went back to the drawing board after chief executive Joe Higgins told staff of an "unspecified significant development" forcing it to alter its plans.
Fears are now growing that an announcement about the bank's future could come as soon as tomorrow.
A leading union said yesterday the bank could hive off almost half of its €33.4bn loan book into a 'third force' merger of Irish lenders.
It argues that its inclusion would give the new entity a crucial business lending dimension.
This would leave BoSI's parent Lloyds Banking Group in charge of running down the remainder of the group's portfolio, dominated by property development loans.
Trade union, Unite, commissioned FGS Consulting to look into how BoSI could evaluate how it could best position itself to participate in sector consolidation -- at a time when EBS and Irish Nationwide are already in tie-up talks and Permanent TSB expects to be invited into the fold later in the year.
None of the three has a background in lending to small- to medium-sized enterprises (SMEs).
BoSI's own management, headed by Joe Higgins, is known to be working actively behind the scenes in an effort to find a way into a 'third force'.
It is pitching the fact that the bank has a strong SME function -- a legacy of its 2001 purchase of ICC, the former State-owned lender to Irish industry. "Corporate lending and property-related lending should remain with BoSI (Lloyds), while the following business lines should be transferred -- retail banking, or Halifax, financial intermediary and SME lending," according to the FGS report, published yesterday.
FGS estimates that BoSI has about €8bn of SME loans currently outstanding -- equivalent to a quarter of its entire portfolio.
The authors of the report believe that BoSI/Lloyds should also take a minority stake in the merged entity.