After 25 years serving staff and students at the University College campus in Dublin, Bank of Ireland has lost the franchise to rival AIB.
AIB will take over the service with a potential customer base of 18,000 students and 2,000 staff early next year. Bank of Ireland's franchise runs out on February 28th, 1999. AIB has just been awarded the licence to operate on the UCD campus for 10 years.
An on-campus branch is seen as an important strategic location in the competitive drive to win young customers. Students are seen as particularly attractive customers because they are potentially high earners. Special packages are offered by all the banks to attract them.
Over the past year the UCD governing authority approached a number of financial institutions seeking proposals for the operation of the campus banking service when the Bank of Ireland licence expired.
Such was the secrecy surrounding the competition that neither UCD or AIB were prepared to disclose the "key-money" the bank paid for the right to operate on the campus. Banking sources suggested that the payment would be "sizeable" reflecting the opportunities to win young customers.
UCD would not reveal the criteria used in its choice or even how many financial institutions were approached. A committee was formed to decide between the competing proposals, a spokesman said.
The franchise was awarded after a competitive process which involved a number of banks submitting their proposals for the service, he said. No details could be revealed because the information was commercially sensitive, he added. The decision was made by the finance committee which was authorised to do so by the UCD governing authority, he added.
The arrangements will involve AIB leasing the existing 316-squaremetre bank branch building from UCD.
Expressing disappointment at the loss of the UCD branch, a Bank of Ireland spokeswoman said it would like to retain its UCD customers. These customers are very active electronically, she said, adding that the bank has a branch close to one of the entrances to the UCD campus.
Bank of Ireland has operated the banking service at UCD campus since March 3rd, 1973.