BOI to shut branches in UK

BANK of IRELAND will close a significant number of Bristol and West’s 132 branches under a massive restructuring plan for its ailing mortgage business in the UK, it was reported yesterday.

Bristol and West, which comes under the wing of Bank of Ireland UK Financial Services, employs around 2,800 staff in Britain. Bank of Ireland generates around a quarter of its profits from operations in the UK.

It’s understood the closures will be overseen by new Bristol and West chief executive Roy Keenan.

They are designed to tackle the high cost base of B&W, which has a 2% share of the mortgage market.

The group’s return on invested equity was cut to just above 8% following the acquisition of Chase de Vere.

B&W also has a cost-to-income ratio of 57%, higher than most banks in the same market.

BOI announced some weeks ago that around 350 jobs will be shed through the restructuring of two of its loss-making operations in the UK. Chase de Vere and MX Financial solutions will be merged, leading to a £95 million write-off this year.

The new entity, with 450 staff, will be repositioned in the employee benefits market. BOI chief executive Mike Soden said the rationalisation decision reflected “the current depressed investment climate”. He added that it was important for the bank to focus on its strongest financial advice asset.

Bank of Ireland acquired Chase de Vere in 2000 as it embarked on a major expansion scheme across the water.

However, Merrion Stockbrokers, in its latest research, said Bank of Ireland should either rationalise its operations in the UK or get out altogether.

It was reported that Mr Soden will rule out any new acquisitions in the UK when the bank’s full year results are posted in April.

BOI last year made a failed bid for Abbey National and investors are now looking for clarity on the Irish banking group’s position on acquisitions.

Bristol & West holds around 205,000 mortgage accounts and some 1.2 million savings accounts. It has assets of around £13 billion (20 billion).

Last year, B&W said its restructure into one single UK division of Bank of Ireland would allow it to build further on its success to date and give it new opportunities to develop business in the broader financial services arena.

Bank of Ireland UK Financial Services is one of the largest divisions of the Bank of Ireland and delivered pre-tax profits of £210 million before goodwill last year.