Allied Irish Banks (AIB) is to close 15 branches before the end of the year due to the Covid-19 pandemic and the “unrelenting” shift towards online banking.
The bank said on Tuesday it had completed a “detailed strategic review” due to changes in how customers interact with banks, a trend that “has been accelerated” by the Covid-19 pandemic.
“Following the unrelenting shift in customer preference for digital banking over the last number of years, AIB is announcing the amalgamation of 15 branches in locations across the country by December this year,” it said.
The vast majority of the closures are in urban and suburban locations, mostly in Dublin and Cork.
AIB said accounts in the closing branches would be moved to neighbouring locations, with the average distance to a receiving branch about 2.2km. AIB will have 170 remaining branches following the closures.
The move has been heavily criticised by the Financial Services Union (FSU). The group’s general secretary John O’Connell said the Republic’s bank branch network was “being destroyed”.
“We will exit the pandemic without a functioning bank branch network and with local communities and small businesses bereft of vital banking facilities,” he said.
“AIB has announced today that they will be closing 15 branches across the country including six in Cork. They have also announced the closure of AIB branch on O’Connell Street in Dublin.
“The branch network is being destroyed without a word of concern expressed by the governor of the Central Bank who has responsibility for consumer protection.
“We know when Bank of Ireland made their announcement to close 88 branches that the Central Bank governor had not even met the bank to discuss the issue.
“We would call on the governor to immediately meet with both BOI and AIB and ask them to pause any branch closures until society and the economy reopens and a full debate occurs on the future of banking in Ireland.”
AIB said the closures would happen on a phased basis, beginning in September, and that there would be no compulsory redundancies. The bank will communicate details to customers, who “do not need to take any action”.
The FSU said there was a “social obligation” on the banks to help struggling SMEs to recover from the pandemic, but said it was “clear our two main banks have placed additional profits before their societal obligations”.
It accused the banks of using the pandemic “as cover” to remove vital services from communities across the country.
“The FSU has called for a banking forum where all these proposals could be discussed,” it said.
“If the Minister for Finance continues to prevaricate on the establishment of a banking forum, we will find that the branch network will already be gone before any forum is established.
“The Minister for Finance and the governor of the Central Bank need to jointly tell the banks that their actions are undermining the chances of a successful reopening of the economy and are causing enormous levels of stress to staff, businesses and local communities.”
AIB also cited negative interest rates and “competition from non-traditional lenders” as it announced the closures, which it said were “another step towards ensuring a sustainable future for AIB’s branch network”.
The Labour Party claimed that AIB’s decision to close branches is “shocking”.
Its finance spokesman Ged Nash said Minister for Finance Paschal Donohoe “must quickly step-in and use his leverage over the majority State-owned AIB to at least pause any consideration of branch closures until such time as the banking review which he says he is committed to undertaking has been completed.”
Mr Donohoe responded to this saying: “The Labour Party well know that no shareholder has a role with regard to commercial decisions. They know that.
“They know that any shareholder in a bank, including even a large shareholder as we are with AIB, does not have the ability to intervene in a commercial decision.”
AIB managing director for retail banking Jim O’Keeffe said the group “remains committed” to maintaining a strong presence in communities.
“However, inevitably and in line with the evolution of banking and customer needs, we are seeing a requirement to evolve our services to customers,” he said.
“We see that in overall digital usage, with customers interacting with our app more than 1.54 million times a day compared with just 35,000 daily branch visits. That convenience at the tip of our customers’ fingers means they are using branches less.”
Full list of closures:
College Road (Cork)
Blackrock Road (Cork)
Little Island (Cork)
North Main Street (Cork)
Ennis Road (Limerick)
Douglas Court (Cork)
Golden Island (Westmeath)
O’Connell Street (Dublin)
Newcastle Road (Galway)