Wednesday 24 January 2018

TSB adds to interest rate woe by axing 280 staff

TSB employs 1,800 people -- down by around 400 from the peak of the housing bubble when it employed 2,200. Photo: Steve Humphreys
TSB employs 1,800 people -- down by around 400 from the peak of the housing bubble when it employed 2,200. Photo: Steve Humphreys

Charlie Weston Personal Finance Editor

INTEREST rate-raising bank Permanent TSB will axe 280 of its staff in a radical cost-cutting move.

The bank, which has traditionally been the country's largest mortgage lender, told managers at a meeting in Dublin yesterday about the planned redundancies.

A massive jobs cull across all the domestic banks is expected this year, with as many as 10,000 jobs being lost.

And now that the managers have been informed, Permanent TSB's other workers are set to be briefed on the job losses over the next couple of days.

At present, the bank employs 1,800 people -- down by around 400 from the peak of the housing bubble when it employed 2,200.

Loss-making Permanent TSB is cutting staff numbers and hiking its standard variable rate by a full 1pc in a bid to stem its losses.

Latest results showed that it lost €131m in the first half of last year.

Consultants Accenture have spent five months examining the bank's costs and set out a range of proposals for management on how to get back to profitability.

Permanent TSB has been the country's biggest mortgage lender, but has issued very few loans over the past two to three years.

A spokesman for the bank said that as Permanent TSB was not doing any significant level of new lending it needed to reduce staff numbers to reflect this.

The spokesman denied the move was related to the fact that mortgage arrears have risen in line with an increase across all lenders.

Unite, the trade union which represents most of the workers in the bank, said last night that it was in talks with senior management about the restructuring.

A spokesman for the union said most branch staff earned less than €30,000.

Last night there were fears that other banks and building societies were about to lay off large numbers of bank workers.

Hundreds of jobs are to be axed at Irish Nationwide and Anglo Irish Bank under a plan to be submitted to the European Commission by the end of the month.

Some 1,600 staff at the two institutions are set to learn their fate soon.

Thousands of bankers will lose their jobs this year as Ireland's banks are downsized as part of the IMF/EU bailout terms.

There are fears that as many as 10,000 of these jobs could be lost.

Up to 750 staff will exit Bank of Ireland over a two-year period under a severance programme agreed by the bank last year. And discussions about potentially thousands of job losses at AIB have gotten under way.

Barrister Mark Connaughton is mediating the terms on which discussions about job losses at AIB will proceed. A final decision on job losses at the bank is expected in April.

A previous redundancy plan, drawn up by AIB's former managing director Colm Doherty, included the axing of 3,000 jobs.


Previous AIB staff who took redundancy packages were offered eight weeks' pay for every year of service, although a new package is expected to be less generous. The terms of any such severance deal will have to be notified to and approved by the Finance Minister.

Last year 750 staff in Halifax, which is part of Bank of Scotland, lost their jobs when the Scottish bank shut its Irish operations. This time last year some 300 people lost their jobs when Postbank, which operated in 1,000 post offices, shut down.

Meanwhile, the union representing bank workers -- the Irish Bank Officials' Association (IBOA) -- has challenged all of the political parties to outline their strategy to save jobs in the sector.

IBOA general secretary Larry Broderick said 2,000 more banking jobs were already earmarked to go in the near future and called for an "urgent" response.

The finance union said there were between 40,000 and 50,000 employed in the retail banks here.

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business