Micheál Martin urged to step in to stop BoI cutting 1,400 jobs

Bank of Ireland  CEO Francesca McDonagh said there is “no read across” from the 1,400 voluntary redundancies to Bank of Ireland closing any branches. Picture: Gareth Chaney Collins

Taoiseach Micheál Martin has been urged to step in and stop Bank of Ireland from cutting 1,400 jobs amid fears the redundancies will lead to branch closures in rural Ireland.

Bank of Ireland chief Francesca McDonagh made the surprise announcement as the lender unveiled a loss of €669m in the first six months of the year, after chalking up €937m in credit impairments so far to take account of the Covid-19 hit on its loans to households, corporates, and small firms.

Like most lenders, Bank of Ireland has been struggling for a number of years to curtail costs and has sought to spend on digital services.

Ms McDonagh said the bank has for some time signalled it would bring staff numbers to below 9,000 from the 10,300 people it currently employs, as demand rises for its digital banking services.

However, she said there is “no read across” from the 1,400 voluntary redundancies to Bank of Ireland closing any branches.

The plan for redundancies is “fair and appropriate”, she told the Irish Examiner. The bank has to devote resources and needs to respond to the needs of customers “and increasingly that is online”, she said.

Bank of Ireland has today announced it is to cut 1,400 jobs of its Irish workforce over the next few years. Picture: Andy Gibson

Bank of Ireland -- in which the Government holds a 14% stake -- has 244 branches in the Republic and 28 branches and six business centres in the North, where it has ordered a strategic review of its operations. It also has other significant lending operations in Britain.

It has already closed branches at university campuses and hospitals because of reduced demand during the Covid crisis and won’t renew leases at Cork and Dublin airports because of declining business.

However, the Financial Service Union’s secretary-general John O’Connell said he fears the redundancies will entail the closure of branches in rural Ireland. He has written to the Taoiseach to intervene to get Ms McDonagh to think again.

“Any redundancies could potentially lead to branch closures. This is why we need to see a pause now on proposals to allow for an examination of the full effect of redundancies," Mr O’Connell said.

Sinn Féin and the Labour Party called on the Government to stop the redundancies while Finance Minister Paschal Donohoe urged the union and the bank to engage over the voluntary redundancy package.

On the Covid economic fallout, the bank said its impairment costs will likely increase to between €1.1bn and €1.3bn over the full financial year.