Central Bank urged to halt AIB and Bank of Ireland branch closures 

Bank workers' union urges Central Bank governor Gabriel Makhlouf to ask AIB and Bank of Ireland to pause branch closures 'until society and the economy reopens'

Central Bank governor Gabriel Makhlouf. The regulator said it cannot require banks to keep branches open. 

The Central Bank has been urged to directly intervene and try to halt the huge number of branch closures planned by AIB and Bank of Ireland until the Covid crisis passes and a detailed plan is agreed on the future of the Irish banking system.

In light of AIB announcing the planned closure of a further 15 branches – including six in Cork– bank workers’ representative the Financial Services Union (FSU) has urged Central Bank governor Gabriel Makhlouf to meet with both AIB and Bank of Ireland and ask them to pause branch closures “until society and the economy reopens and a full debate occurs on the future of banking in Ireland”.

AIB said it plans to close 15 branches – mainly concentrated in Dublin and Cork – from September and amalgamate services into nearby branches.

Last week, AIB announced plans to more than halve the number of branches – to just seven – it operates in the North. 

In both cases it has cited a fall-off in physical footfall at certain branches and an increase in online usage.

200 branches slated for closure

In March, Bank of Ireland said it would be closing more than 100 branches on the island of Ireland later this year. When the planned market exits of Ulster Bank and KBC Bank Ireland are factored in there are currently about 200 local bank branches – across all lenders – slated for closure in the Republic alone.

The FSU said it was not opposed to change. But, while it sees the future of Irish banking as a blend of a “robust” branch network and online services, it said this level of planned closures is “unprecedented” and would be damaging to the banking needs of SMEs, farmers and members of the public.

“We will exit the pandemic without a functioning bank branch network and with local communities and small businesses bereft of vital banking facilities,” said FSU general secretary John O’Connell.

The branch network is being destroyed without a word of concern expressed by the governor of the Central Bank, who has responsibility for consumer protection.”

Mr O’Connell said he “cannot understand” why the Central Bank cannot step in to ask for a pause to closure plans in the midst of a pandemic and ahead of a wider debate about the structure of banking in Ireland.

He said the Central Bank should copy the UK regulator, the Financial Conduct Authority, which earlier this year asked Britain’s banks to reconsider branch closures during the Covid lockdown.

But, the Central Bank has already backed away. It said it was “aware” of AIB’s plans, but said such a move is “a commercial decision for the board of AIB”.

“While the Central Bank cannot require firms to keep bank branches open, we expect all regulated entities – including banks – to ensure that the impact of its decisions is considered carefully and with a consumer-focused approach,” it said.

Labour Party finance spokesperson Ged Nash said a moratorium on branch closures and staff cuts at State-owned banks was needed. 

He said AIB must halt its planned closures until the bank review is completed and urged Finance Minister Paschal Donohoe to leverage the State’s 71% stake in AIB to prevent local branch closures.