Surprise as Rabo shuts ACC

Farmer groups have raised concerns about the closure of ACC’s retail bank with the loss of 180 jobs.

Surprise as Rabo shuts ACC

In a move that caught the market by surprise, ACC announced it would shut all deposit and current account services during 2014, which will affect 5,000 customers with €110m on deposit. It will also relinquish its banking licence.

The 86-year-old, formerly state-owned bank, which was privatised in the early 1990s and taken over by the AAA-rated Dutch firm Rabobank in 2002, said it would keep open Rabobank Ireland PLC, which focuses on lending to the agri-sector.

Irish Farmers Association farm business chairman Tom Doyle demanded a meeting with the board of ACC.

“ACC have confirmed to IFA that they will continue to service all farmer-related term loans, and the bank intends to continue to provide new loans to their farmer customers,” he said. “However, farmer customers who have a current account and overdrafts with ACC cannot be negatively impacted by the decision of the bank to close these facilities.”

ICMA president John Comer said the closure “will cause huge concern to the institution’s farmer customer base which will, in most cases, be faced with making completely new banking arrangements”.

Rabobank has pulled the plug on ACC as it continues to lose hundreds of millions in property losses. Since the property market crashed in 2008, it has haemorrhaged nearly €1.4bn in losses.

ACC will retain 290 staff focused exclusively on debt recovery. It intends to outsource some of its loan book to the services firm Capita.

The bank said it would write to all customers over the next few days to make arrangements for the return of all deposits, plus interest.

Siptu’s Adrian Kane and Unite’s Colm Quinlan said “the workers are obviously very angry about the announcement, especially since they have been consistently told over the last five years that it was ‘business as usual’. We will be seeking an urgent meeting with the Government to look at utilising the skills base of ACC staff, which, combined with capital in the strategic investment fund and other funds, could be used to develop a state investment bank.”

During the boom years, ACC made a series of disastrous bets on the property market. High-profile clients included independent TD Mick Wallace, disgraced solicitor Michael Lynn, and Cork developer John Fleming, among other casualties of the bubble.

Kevin Knightly, country manager, said: “ACCBank has incurred significant losses since 2008 due to the deterioration of the Irish property market.

“While costs have been cut significantly, including a substantial restructuring programme in 2009, we are heading towards a situation where, without intervention, our costs will exceed our income during 2014. This is an unsustainable position and we need to take action now.”

In 2012, Danske Bank announced it was to close its Irish retail unit after incurring heavy losses in property lending. Bank of Scotland Ireland has shut all of its Irish operations. The fate of Ulster Bank will be known over the next week as its parent company, Royal Bank of Scotland, reviews its loss-making businesses.

Business groups have hit out at the contraction of the banking market, which they say is affecting competition.

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