Bosses seek to run wind-up of institution

SENIOR management at Bank of Scotland (Ireland) are believed to have applied to head-up the new company that will be set-up to run the bank’s €32 billion loan book following its pull out of Ireland.

Bank of Scotland (Ireland), which is owned by British-based Lloyds group, is to cease to operate as a licensed bank in Ireland at the end of the year.

It is transferring its business to its parent company on December 31 and will appoint a separate firm to wind down its Irish loan book, a process that will take around 10 years.

BoSI chief executive Joe Higgins said, however, that the company may decide to sell its Irish loan book.

“I think there is the possibility that Lloyds may wish to dispose of the book,” Mr Higgins said.

He said the reason for the pull-out is because Lloyds wants to focus its resources on other opportunities across the group.

Mr Higgins would not comment on speculation that he a number of other senior managers at BoSI have applied to run the new operation. He said Lloyds will make a decision on who the operators of the new company will be “as soon as possible”.

He also refused to say when BoSI informed the Financial Regulator of its decision to withdraw from the Irish market.

The bank has 175,000 Irish customers and a loan book of €32bn.

The company said that a review of operations led to the conclusion that there’s “little opportunity” to achieve enough growth to justify staying in Ireland.

It will immediately cut 36 jobs. Unions say the future for 800 other staff “is clouded by uncertainty.”

BoSI first entered the Irish mortgage market in 1999 and two years later bought state-owned ICC. It closed its Halifax retail network in June with the loss of 750 jobs. Loan-loss provisions in the Irish business rose to £1.56bn (€1.9bn) for the first half of the year, from £1.03bn in the same period last year.

BoSI will begin writing to customers by the end of September to set out how the changes will affect them and explain the next steps that they may need to take.

Managing director of Treasury Solutions John Finn said the closure of BoSI is bad news as it is “tangible evidence of the market shrinking”.

Small business group, ISME also said the withdrawal of BoSI highlights the urgency required by Government to force the “big two” to start lending, which ISME said they are “patently failing to do”.

Bank of Scotland (Ireland) has its head office in St Stephen’s Green Dublin and has regional offices in Belfast, Cork, Galway, Limerick and Waterford.

Mr Higgins said it has not yet been established if the new company will also operate from here.