Bank of Scotland boosts Irish business

BANK Of Scotland is to beef up its retail presence in Ireland by expanding its successful mortgage business and moving into credit cards and retail deposits.

The bank said yesterday that it would create up to 150 new jobs and launch a series of retail banking products over the next 12 months to complement its existing business banking operation here.

Bank of Scotland (Ireland) chief executive Mark Duffy said the bank had always intended to expand into retail banking "when the conditions were right". He said the bank's application to become a member of the Irish money transmission system, coupled with a new industry code of practice to make it easier for customers to move between banks, meant these conditions had now been achieved.

Forty of the new jobs will come from the transfer of the call centre that handles the bank's Irish direct mortgage business from Edinburgh to Dublin.

That operation accounts for over €2 billion in mortgage lending. Bank of Scotland (Ireland) executive director Harry Slowey, who will head up the bank's Irish retail arm, said the move would improve service levels and cut the turnaround time between submitting a mortgage application and drawing down funds.

Mr Slowey said the changes reflected the bank's transition from being a niche player to mainstream lender in Ireland. He added that the move would allow it to offer further mortgage products, including those aimed at first time buyers and the buy-to-let market, as well as fixed-rate and interest-only mortgages.

So far, the bank has concentrated on homeowners who are trading up and looking for relatively low loans in relation to the value of their properties.

Mr Slowey said he expected the bank to lend around €800 million in this year and win a 7% market share. "A target of 15% market share in the coming years is on the cards, given our move to being a more mainstream contender with a wider distribution base," he added.

The bank will also offer credit cards and deposit accounts to the retail market. Mr Slowey said the bank had already attracted €5 billion in deposits from its business customers but would build on this with a targeted marketing campaign and attractive interest rates. He added that Irish consumers could look forward to "price led" credit card products over the next three to six months.

This move that is expected to radically shake up the credit card market and offer lending rates significantly below those available from existing card providers.

Bank of Scotland's Irish business banking operation recorded pre-tax profits of €157 million last year, a 36% increase on 2002. It claims a 19.6% share of the business banking market, with a loan book of over €8 billion.

The bank employs 700 people in Ireland and plans to overtake Bank of Ireland as number two business bank during 2004. It has offices in Belfast, Cork, Limerick, Galway and Waterford, with a flagship building planned for Dublin's St Stephen's Green.