current

Shock as another bank announces branch closures

Staff at a Sligo bank branch were shocked yesterday to learn that their top management had considered closing the entire operation of the bank in Ireland with the complete loss of all jobs.

However according to the CEO, Permanent TSB, which is 99.2 per cent owned by the State, will instead shut branches, cut jobs and reduce deposit rates as it tries to return to viability.

The bank's boss, Jeremy Masding told the Oireachtas Joint Committee on Finance the bank would unveil details of its restructuring plan next week.

However, it is understood the Permanent TSB will cut at least 20 of its 92 branches. Mr Masding would not comment on the level of closures yesterday.

The Sligo branch on O'Connell Street was rebuilt from the shell of the former McDonalds site when the fastfood outlet decamped to Carraroe. Its departure followed Burgerking who also closed its O'Connell Street branch and abandoned Sligo permanently.

The Permanent TSB CEO also raised concerns with the new personal insolvency legislation which is going through the Oireachtas.

Jeremy Masding said the treatment of loans in negative equity was "unclear".

He added that role of personal insolvency practitioners, who work as independent intermediaries between banks and borrowers, needed to be monitored and that those individuals should not be allowed to advertise their services.

Referring to the branch closures, he said the job losses would be achieved through a voluntary severance scheme but he would not put a number on the redundancies.

The bank has been criticised by customers for its elevated standard variable home loan rate which is currently second most expensive in Ireland after Ulster Bank.

Mr Masding said the company had cut its standard variable home loan rate by 0.85pc over recent months.

Mr Masding said he was not ruling out further reductions in home loans but it would depend on deposit rates and the cost of funds to Permanent TSB.

He said that the deposit rates offered to savers by Irish banks were currently "irrational" and had pushed up the cost of funds.

The bank took out newspaper advertisements yesterday announcing a cut of 0.5% in deposit rates for savers.

Distressed Mortgage Holders

Fianna Fáil finance spokesman Michael McGrath TD said the company's arrears were "alarming" with 34% of the banks buy-to-let mortgages in arrears.

Mr Masding said distressed mortgage holders in arrears would be dealt with on a case-by-case basis but warned that if the bank deemed that a mortgage holder had the capacity to repay a portion of a debt even after a house had been surrendered or sold then it would pursue that customer.

In Sligo, staff will be anxiously waiting to see if their branch survives the cuts next week.

The news follows the announcement by National Irish Bank that they are closing their Sligo branch and transferring their daily cash business to An Post. See SligoToday 30/6/12

Allied Irish Bank (AIB) also announced within the past few weeks that they too will be closing a significant number of branches throughout ireland. Sources within AIB told SligoToday.ie that the Collooney branch is likely to be axed along with either Ballyshannon or Bundoran in south Donegal. See SligoToday 7/7/12