Bank of Ireland boss defends branch closures

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Bank Of Ireland Boss Defends Branch Closures
Bank of Ireland's Group CEO Francesca McDonagh said demand for online services is strong
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The chief executive of Bank of Ireland insists they would not be considering closing branches, if there wasn't an increase in demand for digital services.

The bank is closing 88 branches, prompting concerns that some communities will be left without banking services.

Speaking at a joint Oireachtas Committee this afternoon, Bank of Ireland's Group CEO Francesca McDonagh said demand for online services is strong. She gave an example of the first three days of any week – between Monday and Wednesday – where “we will have more accesses, more log-ins onto our mobile app, than we would have visits in the 88 branches we are closing in an entire year”.

“That’s just to give you an idea of the seismic shift [in banking]," she said.

Threat to remaining branches

She said banking is not immune to consumer trends towards online banking. “We’re the leading provider to the agri-sector; 80 per cent of our loans in the agricultural sector are done outside of branches. We speak to farmers, and we bank 40,000 farmers, they would prefer that one of our mobile advisers goes and visits them – within the current Covid restrictions – or do it online or mobile, so they can carry on with their business of running their farms.”

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Asked by Fianna Fáil TD Jim O’Callaghan if the online trend means the rest of the branch network is under threat, Ms McDonagh said: “What we see is that even though many customers prefer to do things online, we still see many customers who want to come into a branch. So for a mortgage advisory journey for a first-time buyer, some will prefer to come into a branch.

"We would find it also with insurance and life events like bereavement issues and complaints. We are keeping 169 branches because they will have footfall and sales and service volumes that support that model. I’m not proclaiming we will be in a branchless society for the foreseeable future. Branches play an important role, just unfortunately fewer of them.”

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She also told the Committee that her last meeting with the Governor of the Central Bank, Gabriel Makhlouf, was in April 2020, which was a virtual meeting. While she has had regular meetings with senior members of the Central Bank’s supervisory team, she has not met with Mr Makhlouf since April 2020, despite the announcement of branch closures.

Ms McDonagh also confirmed that the group was looking at embattled stockbroking firm Davy, which has been put up for sale two weeks' ago in the wake of a bond-trade scandal.

She said that if the bank did buy the stockbroker, it would seek permission from the Minsiter for Finance Paschal Donohoe to allow for bonus pay for its employees. The chief executive referred to the current caps on banker pay at bailed-out banks as “anti-competitive”, saying it makes it difficult to compete with other international banks in the market and fintechs for “talent”.

 

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