Halifax retail banking business in Republic of Ireland to close.
Corporate and commercial banking to be main focus in the future.
Key Changes
Following a strategic review, the Board of Bank of Scotland
(Ireland) intends to reshape its business to reflect the continuing very
difficult economic environment and to secure a viable future for the Bank.
The Bank’s key intentions are as follows:
• To maintain a strong presence in the corporate and commercial banking
markets in Ireland.
• To close Halifax retail banking business in the Republic of Ireland on
a phased basis, commencing in late May 2010 including the 44 retail branches,
the customer service centre in Dundalk and the direct support functions. The
withdrawal of Halifax retail products for new business is effective from today.
• To close the Bank of Scotland (Ireland) Intermediary business which
provides residential mortgages through brokers, motor finance and commercial
asset finance. The withdrawal of these products for new business is effective
from today.
• To implement approximately 750 redundancies across Bank of Scotland
(Ireland) this year. No redundancies are planned to take place within the next
three months and the majority are planned to take place from end-May to July
this year.
Customers do not need to do anything at this stage and customers’
savings and investments remain secure. Bank of Scotland (Ireland) will
commence contacting customers by the end of February 2010 to explain what this
announcement means for them and the next steps following this announcement.
The strategic review, conducted by management and approved by the Board
of Bank of Scotland (Ireland), concludes that the Bank should reposition
itself in a way that reflects the very difficult economic environment. As
such, the Bank plans a renewed focus on its established strengths and long
standing ICC Bank heritage of corporate and commercial banking.
The review found that, as a result of the continuing very difficult
economic environment, the Halifax retail business and Bank of Scotland
(Ireland) intermediary business will not, unfortunately, achieve their
financial and strategic objectives as originally planned. The fledgling
Halifax retail business lacks the required scale to succeed in this very tough
economic climate. There is no strategy for this business that will see it
achieve break-even or profit in a realistic timeframe. Unfortunately, the
Halifax retail banking business is simply too small to succeed in this
contracting market. As a result of these findings it is intended to close
these businesses and arrangements are being put in place for impacted
colleagues and customers.
The Financial Regulator has been informed about the Bank’s intentions.
The Halifax business in Northern Ireland is unaffected by today’s
announcement. So too are all other Lloyds Banking Group businesses in Ireland,
North and South, including Halifax Insurance and Assurance in Shannon, the
Halifax branches in Northern Ireland and call centre in Belfast and the
Scottish Widow operations in Dublin.
Managing Change for Colleagues
Bank of Scotland (Ireland) is committed to working through these changes
with colleagues carefully and sensitively. All colleagues were briefed by
management this afternoon. The union, Unite, was also briefed and the Bank has
commenced a process of consultation.
The policy of Bank of Scotland (Ireland) – and Lloyds Banking Group as a
whole – is always to use natural turnover and to redeploy people wherever
possible to retain their expertise and knowledge within the Group.
Regrettably, due to the lack of redeployment opportunities, the majority of
the planned 750 redundancies are expected to be on a compulsory basis with the
balance being achieved through natural turnover, redeployment and voluntary
redundancy.
The indicative terms which will apply to colleagues who may be made
redundant are set out in our Security of Employment policy. However, these
terms remain the subject of consultation with Unite. In the Republic of
Ireland these terms provide for seven weeks pay per year of service, inclusive
of the statutory or legal minimum entitlement. Regardless of length of
service, colleagues being made redundant will receive a minimum of 13 weeks
pay. The maximum being 130 weeks pay.
We plan to implement this programme of change this year with the
majority of redundancies likely to take place from end-May to July.
Corporate and Commercial Banking
Bank of Scotland (Ireland) is committed to maintaining a strong presence
in the corporate and commercial banking markets in Ireland.
A reshaping of the corporate and commercial businesses is currently
being implemented. These businesses will be focused around the bank’s
established strengths in business banking. The services provided by the
Corporate and Commercial Banking business include corporate financing,
business banking, working capital, wealth management, treasury services and
corporate deposits.
Closure of Halifax retail banking business in the Republic of Ireland
It is planned to close the 44 Halifax branches in the Republic of
Ireland on a phased basis beginning in late-May and concluding in June 2010.
The customer service centre will remain open for a further period of time to
ensure the needs of existing customers are met.
As of today, the Halifax retail banking business ceases taking new
business for current accounts, mortgages, savings, personal loans, credit
cards and insurance products. The Bank plans to write to each customer
specifically about their accounts. For further details please see Editors’
Notes.
Closure of Bank of Scotland (Ireland) Intermediary Business
The Bank of Scotland (Ireland) Homeloans, Motor Finance and Commercial
Asset Finance businesses will also close to new business with immediate
effect. Customers of these businesses will not be required to move their
accounts unless they wish to do so. Customers will receive a letter about any
changes affecting them.
Support Functions
The support functions provide a range of essential services that ensure
the smooth running of the business. These include the Human Resources,
Information Technology, Finance, Risk, Marketing, Products, Strategy,
Programmes & Change, Legal and Premises-Facilities-Procurement functions.
With the reshaping of the Corporate and Commercial banking businesses,
the Bank plans to implement organisational change in these central functions
also. These changes are planned to coincide with the timing of the closure of
the Halifax retail business and the Bank of Scotland (Ireland) Intermediary
business.
The recently formed Business Support Unit (BSU) within Bank of Scotland
(Ireland) will not be impacted by these announcements. The BSU complements the
Corporate and Commercial banking business and is responsible for managing
customers who are most affected by the tough economic times. BSU utilises the
shared knowledge and experience from across Lloyds Banking Group in
understanding the specific issues facing particular businesses with the
objective of returning them to good health where possible.
Commenting on today’s announcement, Joe Higgins, Chief Executive Officer
of Bank of Scotland (Ireland), said:
“It is with deep regret that we announce our intention to close our
Halifax retail business & our Bank of Scotland (Ireland) intermediary business
in the Republic of Ireland, both for the colleagues who contributed strongly
to building these businesses and for the customers who joined us. We have
arrived at this difficult position only after an extensive and exhaustive
review of all options to secure a viable future for the Bank overall and for
these businesses. We will be engaging in consultation with our union partners,
Unite, and we will be working hard over the coming weeks to ensure the process
is as smooth as possible for both colleagues and customers.
Corporate and commercial banking is a significant and established
business for the bank. It is our greatest area of expertise and one which has
a deep and developed customer base. To focus on this business is the right
strategy for the company and all stakeholders.”
ENDS
For further information please contact:
Mark Mohan
Bank of Scotland (Ireland)
Tel: 01 898 0700 Mob: 086 603 2751
Jamie Kennedy
Bank of Scotland (Ireland)
Tel: 01 267 4084 Mob: 087 418 5085
Shane O’Riordain
Lloyds Banking Group
Tel: +44 207 356 1849 Mob: +44 7770 544585
Editors’ Notes
Halifax Retail Customers
Customers do not need to do anything at this stage although they may
wish to look at alternative banking arrangements. All existing affected
customers who currently hold an account will receive a letter explaining
exactly how this change affects them.
Halifax Mortgage, Fixed Rate Savings and Personal Loan Customers
Customers will not be required to move their mortgage, fixed rate saving
or personal loan accounts from Halifax unless they wish to do so. Mortgage and
personal loan customers must continue to make repayments as normal. Customers
will be notified of any changes on how their accounts will be serviced.
Halifax Insurance Customers
Life and Home/Contents insurance product contracts arranged with third
party providers through Halifax or Bank of Scotland (Ireland) are unaffected
by this announcement.
Halifax Current Account, Variable Rate Savings and Credit Card Customers
Customers will still be able to transact on their accounts for the next
three months but it is planned that these accounts will ultimately close.
Customers will be notified in plenty of time regarding the options open to
them. Halifax will assist customers when moving their accounts.
Halifax Pipeline Customers
Any business currently in the pipeline that has reached formal offer
stage will be honoured subject to acceptance within the offer period. Offers
accepted and not yet drawn down will also be honoured subject to the term of
each offer.
There will also be information for customers on the website,
www.halifax.ie, and customers can call 1890 818181 for further information.
BOSI Homeloan Customers
Customers will not be required to move their mortgage, unless they wish
to do so, and must continue to make repayments as normal. Customers will be
notified of any changes on how their accounts will be serviced.
BOSI Commercial Asset Finance & Motor Finance Customers
Customers will not be required to move their accounts, unless they wish
to do so, and must continue to make repayments as normal. Customers will be
notified of any changes on how their accounts will be serviced.
There will also be information for BOSI customers on the website,
www.bankofscotland.ie, and customers can call 1800 556583 for BOSI Homeloans,
01 898 0004 for BOSI Asset Finance and 01 898 0002 for BOSI Motor Finance for
further information.
Bank of Scotland (Ireland)
The company has operated as a bank in Ireland for over 70 years, firstly
as ICC Bank and, since 2000, as Bank of Scotland (Ireland). It has business
banking operations in Dublin, Cork, Galway, Waterford, Limerick, Sligo and
Belfast.
The services offered to businesses across the country by Bank of
Scotland (Ireland) include business lending, business current accounts,
treasury services, deposit accounts, wealth management and investment products.
In 2005 Bank of Scotland (Ireland) purchased parts of the ESB retail
business, which went on to form the basis of the Halifax branch network - the
first of which opened in January 2006. There are currently 44 Halifax branches
around the country and a customer service centre in Dundalk. Bank of Scotland
Homeloans has operating in Ireland for the last decade. It provides
residential mortgages to customers through a network of mortgage brokers.
Bank of Scotland (Ireland) Limited is part of Lloyds Banking Group plc
and is regulated by the Financial Regulator.