PTSB to axe 280 jobs

Permanent TSB has confirmed it will axe 280 jobs over the coming months.

The country’s largest mortgage provider also plans to redeploy another 100 staff from its branches and head office to its online and telephone operations.

The bank, which employs 1,850 people, has already cut 400 jobs in the past two years.

It maintained that no branches will close as a direct result of its restructuring programme, but more customers would use its automated services.

Elsewhere, the bank confirmed that homeowners with a standard variable mortgage will be hit with a 1% rise, hiking its average repayments by an extra €33 a month.

David Guinane, chief executive of Permanent TSB bank, said the two moves were a major part of the bank’s plans to return to profitability by reconfiguring its operations in light of higher costs and reduced business volumes.

“We have set out a roadmap for the recovery of the bank and while that impacts on both customers and staff, it is key to the ultimate recovery and success of the bank,” he said.

“We’re entering a new period for banking in Ireland and we have to ensure that Permanent TSB bank is correctly sized and has the correct margins for the market conditions we are operating in at present.”

Permanent TSB, which is owned by Irish Life & Permanent (IL&P), has 100 branches around the country.

The Unite trade union, which represents 1,200 of its workers, said it was shocked and angered at the scale of the job losses.

Regional co-ordinator Walter Cullen, who held crisis talks with management yesterday, believed the bank was seeking 360 voluntary redundancies and that talk of redeployment was a smokescreen for cuts.

“These are 360 people being forced to pay for the reckless mismanagement of the bank in recent years,” he said.

“The bank was mismanaged on an epic scale under previous senior management who have been able to sail away with fat pensions and severance packages.

“This is a dark day for staff who will also be dealing, as they have in the past, with the pain and anger of customers affected by the mortgage rate increases.

“Unite will engage with management next week to ensure that all the job losses are on a voluntary basis and that the best possible terms are offered to those who leave.”

Most recent figures show Permanent TSB’s once bulging books lost €112m in the first half of 2010 as the property market collapsed. However the bank has not received any capital injections from the State nor has it disposed of any loans to Nama.

Opposition parties Fine Gael and Labour claimed any job losses at Permanent TSB were a result of a botched banking police and an unsustainable economy and property bubble built by the Government.

Larry Broderick, general secretary of the finance union IBOA, said close to 7,000 jobs have already been lost in the sector since the onset of the crisis in the autumn of 2008.

“It is now almost two and a half years since the Government intervened with the blanket guarantee for the six Irish institutions. But we appear to be still no nearer to a common vision of the role of banking in Ireland’s economy and society in the future,” he added.

Meanwhile, Permanent TSB confirmed its new controversial SVR rate of 5.19%, from 4.19%, will come into force on March 7.

The move will affect approximately 80,000 homeowners, just over a third of the bank’s 200,000 residential mortgage customers.

The bank said the average mortgage outstanding for customers with SVR residential mortgages is €66,137.

“The impact of this rate increase on the average mortgage will be approximately €33 per month,” it added.

It stressed the change would have no impact on customers with fixed or tracker mortgage products and said it did not intend to make any further increase to its SVR this year outside of any increase in ECB rates.