“Any psycho can keep on cutting costs,” according to Bank of Ireland CEO Richie Boucher who said the bank was trying to balance cuts with investment to sustain the recovering Irish economy.
Addressing the Cork Chamber business breakfast, Mr Boucher said the bank was committed to maintaining a branch presence at every centre of commerce in Ireland.
The bank has radically transformed the number of staff but in stark contrast to its rivals, it has invested in its branch network instead of shutting branches in smaller towns.
“We have had to have the difficult decision where over 6,000 people have had to leave us. We are employing 6,000 less people than in 2009. Any psycho can keep on cutting costs. The skill we have had to try and deploy is trying to find the room to invest in our companies. In particular, heavy investment in our business in Ireland, we believe in a branch network. We have invested heavily in our branch network. It looks counterintuitive compared to some of the tactics that some of our other competitors are doing. We believe it is vital that we have a business at every centre of commerce in Ireland,” he said.
On a positive note, Mr Boucher said that from the evidence that they could see of money moving through Irish people’s current and business bank accounts, there was a real recovery taking place across the country.
“Our confidence is not misplaced, it’s not Pollyanna, we are not whistling past the graveyard, we are seeing a genuine recovery in the economy. We are putting a huge effort in putting momentum behind that recovery, because you can’t keep restructuring and reducing the cost base, you can’t keep spending the whole time in meetings with investment banks, lawyers, European officials and government officials, we have to generate revenue. We need to generate revenue,” he said.
An area that Mr Boucher returned to twice as an opportunity for the bank was its partnership Post Office in the UK. He said this was an opportunity other banks would kill for.
“We have a huge opportunity with the Post Office. Banks throughout the world would kill to be the sole financial services provider where the British government has invested in the branch network, where the Post Office is the most trusted brand in the UK. Where we have 20m people a week in those outlets and 11,500 outlets,” he said.
Despite the opportunity in the UK operations, Mr Boucher insisted it is the core Irish element of the bank that will drive future growth. He said it was the growth potential in Ireland that had attracted US investors Wilbur Ross and Franklin Templeton to invest in Bank of Ireland.
“In 2011 when we had to recapitalise in the middle of the crisis we got some of the most prestigious but tough-minded people in the world who believed in this country. These are tough people but they took a view that Ireland would recover, they saw Bank of Ireland as a wonderful opportunity for them to participate in that recovery. They invested the capital, that capital has to be deployed,” he said.
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