Friday 19 January 2018

Boucher throws lifeline to BoSI firms


BANK of Ireland (BoI) chief executive Richie Boucher has thrown a lifeline this weekend to businesses left reeling by the decision of Bank of Scotland (Ireland) to shut down its operations.

Speaking to the Sunday Independent, Mr Boucher called on those looking to transfer their banking business to make contact with BoI, saying: "Our door is very much open. We have made it quite clear that growing our small business division is a very important part of our strategy, so we are very keen to get new customers as well as looking after our existing ones.

"I would say to anyone who has a viable business that we are very keen to talk to them."

While concerns have already been raised that BoSI's thousands of business customers might have difficulty opening current accounts, securing overdraft facilities and working capital in cases where the bank holds the security over their assets, Mr Boucher insisted each prospective client would be looked at on a "case-by-case basis".

"We would have to look at the security that's available to us on a case-by-case basis. I don't want to make any blanket assumptions but there are probably a lot of very good businesses with Bank of Scotland and we'd be keen to talk to them. But I can't make any sweeping comments. It's difficult. Every customer would have to be looked at on a case-by-case basis," he said.

The BoI chief was already facing calls yesterday -- albeit indirectly -- to step up to the plate in terms of supporting businesses affected by the closure of BoSI's operations.

Irish Small and Medium Enterprises (Isme) chief executive Mark Fielding told the Sunday Independent that the Government would now have to insist that institutions such as BoI and Allied Irish Banks (AIB) be mandated to open accounts for the 5,000 small and medium enterprises under the Isme umbrella hit by BoSI's withdrawal from Ireland.


Commenting on the potential fallout, Mr Fielding said: "If the Bank of Ireland and AIB don't open new accounts, then these businesses are bunched."

Mr Boucher insisted that increasing the BoI's small business customer base was an integral part of its strategy for the future.

"We're very keen. We raised capital this year and people weren't giving us capital because they were fixing a problem [with BoI].

"They invested in Bank of Ireland because they believed that, in the medium term, the economy is going to recover, and they were keen to see that Bank of Ireland is a part of that. It's about growth and people investing.

"Shareholders aren't sentimental people. They invest with their heads, not with their hearts. They expect us to grow our business in Ireland. We can only grow our business if we look after our existing customers and attract new ones," he said.

Asked about the future for competition in the Irish banking in the light of BoSI's withdrawal, he said: "I think there's still going to be competition in this market. I'm certainly not complacent about what the competition is going to be in a couple of years time."

Anglo Irish Bank chief executive Mike Aynsley meanwhile took a different view on the decision by BoSI to abandon its Irish operations.

Mr Aynsley said: "I think it's just another sign that the foreign banks are focusing on their home markets. To me, it's a clear indication of the importance of Ireland getting its strategy together around a number of long-term domiciled, domestic institutions that really control the stability of the banking system."

Asked if the decision by BoSI to pull out of Ireland made his and the Government's case for a new 'good' bank emerging from the ruins of Anglo Irish Bank more valid, Mr Aynsley said: "Well, I think so, yes. I think it underlines what we've been talking about.

"You need enough operating institutions in the country to support the economy."

Commenting on Anglo's completion this weekend of the movement of its second tranche of development loans to Nama, Mr Aynsley said the discount on this €8bn transfer would be in the "low 60s" percentage wise.

This represents a further deterioration on the 55 per cent discount applied to Anglo's first tranche transfer of €10bn in loans to Nama.

It also raises the estimated cost of the bank's bailout from the €22bn figure given by Finance Minister Brian Lenihan last March to between €24bn and €25bn.

Those figures are broadly in line with the €24.4bn Anglo bailout estimate that was given by the EU Commission two weeks ago, and the €25bn figure that was mooted by Central Bank governor Patrick Honohan in a speech he made in the Chinese capital, Beijing, last Tuesday.

Sunday Independent

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