Bank of Ireland is to close half of its branches in the UK and focus on 11 so-called hub locations.

The bank said yesterday the closures would make no material difference to its banking facilities in the UK, where the business is "relationship- rather than location-driven." All 10 branches are cashless and are what the bank described as sub-scale, meaning it believes they can be served just as well from nearby larger sites.

Analysts were in agreement that the move would have little effect on the bank's operations in the UK, where it focuses mainly on the business sector. Eamonn Hughes, an analyst at Goodbody, said he wasn't surprised by the decision and said it was indicative of the competitive retail banking market in the UK.

Emer Lang, an analyst at Davy, agreed, saying the type of business Bank of Ireland is operating in the UK could function just as well with a smaller number of branches. It caters for retail customers through a joint venture with the UK's 16,000-strong post office network.

Ms Lang said the impact on the overall business would be "pretty neutral" with the high cost-to-income ratio of the branches offsetting money required for redundancies. She left her forecasts unchanged for the year to the end of March and is still expecting the UK to account for just over a quarter of group profits.

Yesterday's decision came on the back of a review of the UK operations and follows the sale of its Bristol & West branch network in the UK last year. David McGowan, managing director of business banking in the UK, said the company had invested significantly in business banking in the UK and that its success was evident in the 40 per cent growth in volumes in the year to the end of March.

Bank of Ireland said it will offer voluntary redundancy or relocation for the 141 affected staff, a move that was condemned by the finance union Irish Bank Officials Association (IBOA). "At a time when most financial institutions are expanding their operations and providing improved services to customers, Bank of Ireland seem intent on pursuing a policy of cost-cutting and maximising short-term profits at the expense of staff and customer service," said IBOA general secretary Larry Broderick.

The bank will maintain its presence at locations where there is most business activity, including Edinburgh, Glasgow, Manchester and Leeds. Most of the closures, which will be complete by next July, are in the greater London area, where two branches will remain. Three of the 10 branches due to close are owned by the company and will be sold with no impact on the bottom line. The remainder are leased.

Separately, Bank of Ireland has sold 36 Irish branches in a sale and leaseback for just under €240 million. The deal was done by CB Richard Ellis.