NIB to shut branches as pain goes on
LOSS-making National Irish Bank (NIB), owned by Denmark’s Danske Bank, yesterday said it is to shut 25 of its 58 branches and eliminate 150 jobs to cut costs.
Irish banking has proved a headache for Danske Bank, piling up losses before tax of 3.7bn Danish crowns (£449.3m) in the first nine months of 2009 on heavy loan writedowns stemming mainly from a property bubble.
NIB said in a statement yesterday that the branches would be closed and merged into neighbouring branches.
“Staff numbers will fall by 150 through a voluntary severance scheme,” NIB said.
“The banking sector in Ireland is on life support,” said chief executive Andrew Healy. “Banks have to react by reducing costs and amending their business models.”
The restructuring comes, NIB said, “against the backdrop of continuing recession and sweeping changes to the financial services landscape in Ireland”.
It said customers could be reassured that NIB remains part of Danske Bank, which is covered by the Danish government guarantee scheme announced in October 2008.
Meanwhile, central bank governor Patrick Honohan said Ireland’s banks will emerge from the financial crisis with their capital base repaired and in a shape that will attract strong private investment.
“The Irish banks are going to leave this situation well capitalised, solid … with adequate capital to convince the market that they are going ahead on their own steam,” Honohan said after he had given a speech on financial innovation.