Bank of Ireland Announces Wide-Ranging Shake-Up, including 12% Workforce Cut and Potential Sale of Bristol & West Branch Network

Strategic Insights -

The Bank of Ireland will unveil a significant overhaul today, as part of an upbeat trading statement, which includes cutting 12% of its workforce and evaluating the sale of its entire Bristol & West branch network. The bank's aim is to reduce its cost-income ratio to less than 49% from the mid-50s, with more than €100m in annual cost savings being targeted. Over 2,000 employees out of the bank's 17,000 Irish and UK staff will lose their jobs as part of this drive.

Key Takeaways:

  • The Bank of Ireland will cut 12% of its workforce, impacting more than 2,000 employees out of 17,000.
  • The bank will consider selling its entire Bristol & West branch network, which employs around 1,000 staff in 97 offices and has a savings deposit book.
  • The Bristol & West branch network's performance is not viable, with the branches generating little profit and the majority of customers being over 50 years old.
  • The bank will retain the Bristol & West mortgage business, which contributes €125m of profit to the group each year.
  • The overhaul aims to reduce the bank's cost-income ratio to less than 49% from the mid-50s, with more than €100m in annual cost savings being targeted.
  • The new chief executive, Brian Goggin, has identified the Bristol & West branch network as a problem area, stating that "continuing to run it on the basis of its current performance is not an option".
  • The bank has received several unsolicited approaches from other banks to buy the Bristol & West branch network and its related savings business.
  • The bank's UK operations, which account for 25% of group pre-tax profit, will also be amended as part of the shake-up.

Statistics:

  • The proposed workforce cut will impact 12% of the bank's 17,000 employees, resulting in more than 2,000 job losses.
  • The Bristol & West branch network employs around 1,000 staff in 97 offices and has a significant savings deposit book.
  • The bank aims to reduce its cost-income ratio to less than 49% from the mid-50s.
  • The targeted annual cost savings exceed €100m.
  • The Bristol & West mortgage business contributes €125m of profit to the group each year.

Sources:

  • Bank of Ireland:

* "Bank of Ireland Announces Wide-Ranging Shake-Up, Including 12% Workforce Cut and Potential Sale of Bristol & West Branch Network."

  • "Bank of Ireland to sell 1,000-strong Bristol & West branch network",

* The Times, 14 March 2002.

  • Brian Goggin, Bank of Ireland's new chief executive.