ACCBank closes doors on branch network
Decision by Dutch parent will cost 180 jobs among 470-strong workforce
The decision to close was due to the ‘significant losses’ incurred since 2008, said Kevin Knightly, ACCBank’s country manager.
Eighty-six years after being set up by a government led by William T Cosgrave, ACCBank is to hand back its banking licence next year following a decision by its Dutch parent Rabobank to cut its losses here.
About 180 of the bank’s 470 jobs will be lost as a result of this decision via a voluntary severance programme. The remaining staff will focus on debt recovery, with the management of about 10 per cent of its €4 billion loan book possibly being outsourced to Capita, a specialist in this area.
Kevin Knightly, ACCBank’s country manager, said the decision to close the bank was due to the “significant losses” incurred since 2008 due to the collapse of the Irish property market.
“While costs have been cut significantly, including a substantial restructuring programme in 2009, we are heading towards a situation where, without intervention, our costs will exceed our income during 2014. This is an unsustainable position and we need to take action now,” he said.
ACC recorded a loss of €221 million in 2012, up from €178 million in the previous year. Its losses post-2008 have largely been property related.
Since 2008, more than €2.1 billion of the loanbook has been written down while Rabobank has provided €1.3 billion in capital over the same period.
On its loan recovery strategy, Mr Knightly said: “ACCBank has remained at the forefront of loan recovery in the Irish market. We will continue with our approach but do not need to be a fully licensed bank for this purpose.”
This is a reference to the fact that ACC has been more aggressive in moving against debtors than some of its rivals in the Irish financial sector.
ACC said it would repay in full its 5,000 depositors the €110 million in their accounts.
It will close all its business centres to the public next year although it will continue to be a regulated entity and will support customers in the agri sector.
The decision will not affect the businesses of Rabobank Ireland plc, which focuses on the corporate segment of the the food and agri sector, and RaboDirect, its online operation here.
ACC said it is “exploring the possibility” of outsourcing a portion of its loan book, excluding agri loans, with Capita selected as the preferred service provider.
“We anticipate that the loan book will be managed out over a period of years. We are not seeking to accelerate this and we do not expect this to be a quick process,” the bank said in response to a query from The Irish Times.