NIB to close half of branches

NATIONAL Irish Bank (NIB) will close almost half of its branches and cut 150 jobs as part of a major restructuring programme.

The bank’s chief executive said the banking system in Ireland is on life support but added that NIB is strongly committed to the Irish market despite the cuts, which will be implemented over the next 18 months.

General secretary of finance union, the IBOA, Larry Broderick said he was shocked at the announcement.

He said the IBOA is seeking urgent meetings with the Minister for Enterprise, Trade and Employment and with the chief executive of Danske Bank Group Peter Straarup.

“While I note the bank has committed to engaging with IBOA and has indicated that this programme is voluntary, the proposals in their current form do not take account of the significant contribution made by the bank’s staff in recent years nor do they take account of the potential impact of such wide-ranging closures on the branch network and, of course, on customers.”

NIB chief executive Andrew Healy said the restructuring move is a prudent one in the economic downturn.

“Customers can be reassured by the fact that National Irish Bank is part of Danske Bank, a strong, well capitalised European banking group that remains ambitious for its Irish business and has a long-term commitment to the Irish market,” he said.

He added that banks have to react to tough trading conditions by reducing costs and amending their business models.

“We are taking these actions to ensure we have a long-term future, a healthy future,” he said.

NIB will close 25 of its 58 branches and merge them into other operations.

A voluntary severance scheme will see staff numbers fall by 150 to just over 450. Two-thirds of the reductions will come from the branch network and the remainder from across the bank.

The voluntary severance scheme proposed by NIB offers staff six weeks’ salary per year of service and is capped at two years’ salary.

The IBOA has arranged to meet senior management tomorrow and Mr Broderick said there would be no agreement until NIB ensures that any changes will be achieved by agreement.

NIB is part of Danske bank which is the largest bank in Denmark. It said its Irish customers will continue to be fully covered under the Danish government’s bank guarantee scheme.

Last August, NIB reported a pre-tax loss of €€341m for the first half of 2009.