Halifax to shut branches in Ireland with loss of 750 jobs
Bank of Scotland (Ireland) is to close its Halifax retail banking business in the Republic, with the loss 750 jobs.
The bank, which operates 44 retail branches here under the Halifax brand, unexpectedly announced its decision to staff this afternoon.
The bank, now owned by Lloyds, said the move was part of a reorganisation of its operations which will see it focus solely on the corporate and commercial side of its business here.
In a statement this afternoon, the bank moved to reassure customers that all saving and investments would remain secure, and that it would commence contacting customers by the end of this month to explain what the move meant for them.
It advised all mortgage and personal loan customers to make repayments as normal and said customers would be notified of any changes on how their accounts will be serviced.
The bank's branches will remain open until June and thereafter it is envisaged that mortgage and personal loan customers will be obliged to conduct transactions with Halifax over the telephone, through other banks or via post.
However, customers with Halifax current accounts, variable rate savings accounts and credit cards will only be able to use their accounts for the next three months after which point it is planned to close these accounts. The group said they will assist customers when moving their accounts, adding that customers will be informed in writing of the options open to them.
“It is envisaged that, by June, we will have aided all customers in migrating to an account of their choosing,” a spokesman said.
Speaking in the Dáil, Taoiseach Brian Cowen said the Halifax decision "should not affect other players in the market". He said he had been "assured that all customers of Bank of Scotland Ireland will be
looked after and will not be disadvantaged by the changes".
In a statement, the Financial Regulator said it was working with the Bank of Scotland (Ireland) to ensure consumers’ interests are protected. “Mortgages, personal loans and fixed rate savings with the Bank will operate to maturity,” the regulator said.
Explaining its decision, Bank of Scotland (Ireland) said a strategic review, conducted by management and approved by the board, had concluded that “the bank should reposition itself in a way that reflects the very difficult economic environment”.
“The fledgling Halifax retail business lacks the required scale to succeed in this very tough economic climate,” the bank said in a statement this afternoon.
“There is no strategy for this business that will see it achieve break-even or profit in a realistic timeframe,” it said.
The bank also said that, along with its retail division, it will close all intermediary business which provides residential mortgages through brokers, motor finance and commercial asset finance.
Bank of Scotland (Ireland) chief executive, Joe Higgins, said : “We have arrived at this difficult position only after an extensive and exhaustive review of all options to secure a viable future for the bank overall and for these businesses.”
The 750 job losses are expected to be composed of 400 from the bank’s branch network, 220 from associated services in Dublin and a further 130 from a customer service centre in Dundalk.
The bank, which currently employs about 1,600 staff in Ireland, plans to commence the redundancy process at the end of May and have it completed by July this year.
Unite, the union which represents many workers at Bank of Scotland, said it was “shocked and dismayed” at the move.
“This is a crazy decision to take at such short notice when the prospect of a third banking force in Ireland of which Bank of Scotland (Ireland) could be a huge part is still very much in the mix,” union spokesman Robert Hartnett said.
He said the staff in Dublin and Dundalk and across the branch network heard the news through a telephone conference call from Mr Higgins this afternoon.
“Our workforce is made up of partners; of people who left secure jobs on the promise of a long stable future; and of many returning sons and daughters who took the opportunity to return to Ireland and reunite their families,” said Bernard Daly, secretary of the Unite group within the bank.
“There is a huge human cost to the announcement today, and people are in a state of total shock.”
The Halifax business in Northern Ireland is not affected by today’s announcement.
Fine Gael deputy leader and finance spokesman Richard Bruton said the closure was a "devastating blow" for staff and their families. “This is a landmark event in Fianna Fáil’s ongoing unemployment crisis. Last December finance Minister Brian Lenihan claimed Ireland had turned a corner and that the worst was over. But the worst is yet to come for the bank staff now joining the dole queues.
Mr Bruton said there were also concerns about the plight of the bank‘s customers, in particular mortgage holders. He said Mr Lenihan must state whether existing Halifax mortgage customers will be protected, or whether the bank’s mortgage book will be sold on and their accounts transferred to a higher rate mortgage provider.
He called on the Minister to make an immediate statement on the impact this will have on reform of the Irish banking system, and the consequences for competition in the future.
Labour Party spokesman on employment Willie Penrose said the news was a very serious blow to jobs in this country.
"I would urge the bank to look at all possibilities before it is too late, particularly if there is any real prospect that jobs can be saved. I believe that the parties should now turn their attention to ensuring the best possible outcome for all involved
"This news comes on top of yesterday's announcement of 175 job losses at Boston Scientific, and last week?s disastrous live register figures which shows unemployment at unacceptably high levels."
He called for a new national development plan to provide funding for projects in areas such as health, education and transport.
Bank of Scotland (Ireland) has established various customer contact points, which are listed at branches and on its website. Customers with any concerns or questions about their accounts are advised to contact Halifax / Bank of Scotland (Ireland) directly on 1890 818181 or at www.halifax.ie. The Financial Regulator can be contacted on 01 2246000.