Friends First to close asset finance division

Pensions and investment firm Friends First is to close its asset finance division, Friends First Finance, and cut 147 jobs.

The company said the move was being undertaken as part of restructuring measures aimed at meeting "new challenges" posed by market conditions.

"Following a detailed review, Friends First intends that its total workforce will be reduced by 147 people from the current level of 540 people," the financial services company said in a statement.

"Friends First Finance has been significantly impacted by the global credit crunch and its business model of borrowing from the inter-bank market is no longer sustainable in the current climate.

"The closure of Friends First Finance will unfortunately result in the loss of 98 jobs on a phased basis as the business is wound up over the next 5-7 years."

The company said it was also reorganising its wider business owing to a decline in new business volumes of about 40% this year.

It is seeking to reduce its remaining workforce by 49 people during 2009 through a programme of voluntary redundancies.

"The closure of Friends First Finance is a necessary decision because of the lack of availability of credit, at appropriate rates, combined with the downturn in the Irish economy," said CEO Adrian Hegarty.

“The decision to reduce the workforce across the rest of the business reflects the changing face and reduction in size of the life and pensions sector and we must respond by reorganising our business to meet the challenges of the new marketplace.

"I am confident that the steps we are taking, where we will focus and develop our core business of protection and investment activities, will mean that Friends First can perform profitably and successfully and provide long term secure employment into the future."