The State-owned ACC Bank is preparing to close branches, withdraw from the expensive current account type business and scale down its presence in the mortgage market.

The plan, expected to be approved shortly by the board of directors, is also likely to seek some job losses. The bank, which reports its annual results on Wednesday, is finalising a business plan which will maximise its value in a trade sale. The Minister for Finance, Mr McCreevy, ordered a review of its banking activities earlier this year, following the collapse of the proposed merger and flotation of ACC and TSB Bank.

ACC is understood to have considered closing up to 20 of its 50 branches. Some of the eight Dublin branches are now expected to shut, while others around the Republic will either be closed or restrutured.

The plan will focus on centralising most of its operations at its Dublin head office and will identify where job losses should be sought.

Morale at the bank has remained low following the collapse of the proposed link-up with TSB and up to 80 staff are understood to have already left to work in other institutions.

Several senior management from the retail and corporate side of its business have resigned recently, with most people leaving the corporate banking division.

The bank has also made substantial financial settlements with a few staff members.

One such settlement resulted from a High Court action taken by its former head of retail banking, Mr Jim Skelly, in March after he claimed to have lost his position due to an internal restructuring.

Meanwhile, the Revenue Commissioners continues its audit at the bank to establish the full extent of its liabilities regarding Deposit Interest Retention Tax on bogus non-resident accounts in the 1980s and 1990s.

It is estimated to have potential tax arrears of £1.5-£17.5 million (A1.9A22.2 million). These figures do not include interest, which will also apply.

The bank, which reported profits of £20.5 million in 1998, is expected to make a contingent liability provision in its accounts for DIRT, although the bank claims it did have an amnesty agreement with the Revenue in respect of most of the non-resident accounts which were not liable to DIRT.