Widespread backlash after Bank of Ireland announces closure of 103 branches

The Bank of Ireland branch in Cobh, Co Cork, one of 103 branches which are due to shut their doors permanently later this year. A wide range of political, trade union, and business representatives, and civic advocates, are protesting the planned closures. Picture: Dan Linehan

Business and consumer groups, rural development advocates, trade unions, and a senior Government politician have warned that the decision by Bank of Ireland to shut 103 branches has plunged Irish banking further into crisis and have called on the lender to think again.

Bank of Ireland, which is 14% owned by the Government, plans to close 88 branches and keep 169 branches open in the Republic, and close 15 branches and keep only 13 outlets open in the North. It blamed automation and the reduced number of customers using the branches for the decision, saying it has struck a new agreement with An Post for customers to make bank transactions.

It comes after Ulster Bank over a week ago opted to withdraw altogether from the Republic, a decision that will lead to the closure of all its branches, possibly starting as early as this year.

'Banking duopoly'

However, John McGuinness, Fianna Fáil chair of the Oireachtas finance committee, accused Bank of Ireland of using the link with An Post as “a public relations gimmick” that will do little to boost the takings of individual post offices.

He said there needs to be a review by the Government to effectively save Irish banking from the duopoly of AIB and Bank of Ireland and “to change the game” for Irish banking.

“Ulster Bank has decided to drop out and has opened up the option for others to do likewise,” Mr McGuinness said. 

This decision by Bank of Ireland is a poor decision, and we need direction from the Government as to what they really want to see in the Irish market. 

Mr McGuinness said the banks were ignoring economic policy designed to boost communities, and the Government will now need to step in.

Customers will again be the big losers despite the An Post tie-up, said Dermott Jewell, policy adviser at the Consumers Association of Ireland, who said the scale of the closures was a significant move in Irish banking. 

“Customers did not sign up with and pay their fees to Bank of Ireland to transact their business with premises down the road,” Mr Jewell said.

Bank of Ireland's presence in Bantry, Co Cork, along with 102 other locations across the island of Ireland, is set to cease. Picture: Dan Linehan

Seamus Boland, chief executive of advocacy group, Irish Rural Link, said Ireland is set to end up with “the sickest for longest banking system” in Europe from the last financial crisis because business customers have nowhere else to go when leading banks shut branches.

In the past, Ireland had alternatives with ICC and ACC but, unlike elsewhere in Europe, customers here no longer have much of a choice, Mr Boland said.

Banking 'being hollowed out'

Chief executive of business group Isme, Neil McDonnell, said the Irish banking industry was "being hollowed out" to the benefit of the big two lenders, AIB and Bank of Ireland. Despite the drift to online banking services, Mr McDonnell said the Bank of Ireland plans were "a major blow" and that there was an increasing duopoly in banking.

The chief executive of the Restaurants Association of Ireland, Adrian Cummins, said the announcement, following on from the news of Ulster Bank’s intention to completely withdraw from the Irish market, was a further blow for businesses fighting to survive the Covid-19 economic crisis. 

BoI 'smash and grab'

Mr Cummins accused Bank of Ireland of taking advantage of it to engage in "a smash and grab". He said the Government cannot leave it to banks to decide to close down branches at a time when its National Development Plan is designed to rebalance growth in favour of rural areas. And the move to use An Post offices showed that closures of post offices should be reversed, Mr Cummins said.

The Financial Services Union said it had written to every council in the Republic as part of a campaign to get Bank of Ireland to think again.

Bank of Ireland disclosed an underlying loss of €374m for 2020 that reflects €1.1bn in loan loss provisions during the Covid-19 crisis, although the lender said it had returned to profitability in the second half of the year.