BoI cuts consultant costs by one-third

BANK OF Ireland has shaved 30 per cent off the cost of outside consultants and contractors by renegotiating their contracts and taking external workers off its payroll in a bid to rein in costs amid the economic slowdown.

A spokesman for the bank confirmed it had reduced consultant costs by almost one-third. He said the bank would not reveal how much it was spending on consultants and would not say how many consultants had been taken off its payroll.

The spokesman said the bank expected to reduce consultants' pay further by the end of the year. It has employed large numbers of external consultants on the IT side of its business but has been reviewing pay to consultants in all divisions.

The cost-cuts at Bank of Ireland emerge three weeks after rival AIB said it had taken 300 external consultants off its payroll and replaced them with internal staff.

AIB, the State's largest bank, reduced its staff by more than 600 in the first half of the year. This included 350 departing staff whose positions were not filled.

Some 200 staff were also redeployed to credit management roles to monitor a higher number of riskier loans. AIB reduced its staff costs by 4 per cent to €761 million in the first half of the year.

Bank of Ireland's overall costs remained flat in the year to March, while Anglo Irish Bank cut its costs by almost 13 per cent in the six months to the end of March.

Banks have tightened their belts as they become more restrictive on new lending due to higher funding costs and falling property values, while profits are forecast to fall.

© 2008 The Irish Times

This article appears in the print edition of the Irish Times