B of I rejects UK closures reports as 'speculation'

Bank of Ireland has described reports that it is to close the majority of its 98 Bristol & West branches in Britain as "total speculation".

It was claimed that the bank had identified only a handful of profitable Bristol & West branches as part of an internal review of its UK operations and that it would maintain these branches and rebrand them under its own name, shutting down the rest.

A report published in the Mail on Sunday suggested that British building society Bradford & Bingley might be interested in acquiring the Bristol & West branch network but that Bank of Ireland had ruled out selling. It was previously thought that the bank would be unlikely to find a bidder.

A spokeswoman for Bank of Ireland said the bank's review of the Bristol & West operation was not complete and no decision had been taken yet.

Bank of Ireland, which has 20 branches under its own brand in the UK, bought Bristol & West in 1997 for £600 million (€854 million). At the time, it had more than 150 branches.

However, the building society claims to have been hit by the migration of customers to internet and telephone banking channels. Last year, Bank of Ireland closed 36 branches, with the loss of around 200 jobs, as part of a cost-cutting exercise.

Further cuts have been on the cards since the bank announced an internal review last October. At that time, Bank of Ireland chief executive Mr Brian Goggin said that continuing to run the Bristol & West branch network on the basis of its current performance was not an option.

Mr Scott Rankin, a banking analyst at Davy Stockbrokers, said yesterday that the bank had two options: to sell the whole operation, including its deposit book, or to run down the operation over time.

"The cleanest option from the market's point of view is a straight disposal," he said. "The market likes to draw a line but the clean option may be the expensive option. Any bidder is likely to want the deposits but leave the exit costs to Bank of Ireland.

"If Bank of Ireland chooses to run the branches down, the market will be disappointed that Bristol & West will still be there, taking up management time."

The building society has assets of £13 billion and employs 2,800 people. It has more than 200,000 mortgage customers and 1.2 million savings and investment customers. It is thought that deposit customers could be offered account facilities with the British post office's network of 15,000 outlets, should Bank of Ireland decide to shut down the Bristol & West branches.