Bank of Ireland to let go 1,700 staff by end of next year

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Digital Desk Staff

Bank of Ireland said today that it has taken a €169 million charge to deal with a voluntary redundancy programme that will lead to 1,700 staff departing before the end of next year.

It comes as the bank received over 2,000 applications last month for the scheme, which was announced in August.

As the Irish Times reports, the numbers leaving the bank, including many part-time workers, equate to 1,450 full-time positions, or about 14 per cent of its workforce, the bank said in a trading statement.

It was originally aiming to eliminate 1,400 roles over the coming years as lenders across Europe seek to cut costs as they struggle with ultra-low central bank interest rates and weak lending demand, which has been exacerbated by the Covid-19 crisis.

The programme will cut annual staff costs by €114 million when completed.

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Bank of Ireland said new lending rebounded in the third quarter of the year, with Irish mortgage drawdowns rising 30 per cent compared to the previous three months, when the State was in lockdown.

However, overall new lending for the nine months to September fell by 25 per cent on the year to €9 billion, reflecting how the economy had ground to a halt earlier in the year.

Financial shock

The bank granted 106,000 loan payment breaks to households and business customers in the UK and Ireland between March and September to help them deal with the financial shock of the pandemic.

About 27,000 borrowers extended their payment holidays from an initial three months to six, while 20,000 beaks were still in operation as of the middle of this month - less than one-fifth of the total.

The bank said “For those customers that have come off payment breaks, the significant majority have resumed principal and interest repayments. The number of customers requiring additional support is in line with our expectations.

“The group has a strong track record of credit risk management and working with customers to implement sustainable solutions,”

While overall business improved in the third quarter of the year, group chief executive Francesca McDonagh warned that “recently announced Covid-19 restrictions by the Irish and UK governments combined with Brexit present continued uncertainty”.

The bank has maintained its outlook for the full year, which has been welcomed by analysts.

The group said in August that it expected to set aside €1.1 billion to €1.3 billion of provisions in 2020 to absorb an expected surge in bad loans as a result of the Covid-19 crisis.

It had booked the bulk of the charge - amounting to €937 million - in the first half of the year.

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