REACTION:FINE GAEL finance spokesman Richard Bruton said the closure of the Halifax branch network dealt a "devastating blow" to staff and families. He described the news as "a landmark event" in what was an ongoing unemployment crisis for Fianna Fáil.
Mr Bruton said the concerns of the bank’s customers, and in particular mortgage holders, had to be addressed.
“Minister Lenihan must state whether existing Halifax mortgage customers will be protected, or whether the bank’s mortgage book will be sold on and their accounts transferred to a higher-rate mortgage provider,” he said.
“The Irish banking system is far from out of the woods, and the decision by Bank of Scotland (Ireland) to close its Halifax network also has implications for plans for a third force in Irish banking.”
He added that the Minister for Finance must now state what impact this would have on reform of the Irish banking system.
Labour’s Sean Sherlock, a member of the Oireachtas Committee on Economic Regulatory Affairs, described the decision as “very regrettable”.
“To my mind, and from the point of view of the 750 people who have just been told that they are redundant, not enough was done to protect these jobs. The Unite trade union had offered alternatives to save their members hardship, advice that was ignored by all accounts,” Mr Sherlock said.
“The timing of this decision, when there is much uncertainty in the financial sector, has caused added distress for Bank of Scotland (Ireland)’s remaining employees in the corporate and commercial sector.”
Mr Sherlock said the bank had “heaped further cause for concern” upon its customers.
“Bank of Scotland (Ireland) has taken this decision apparently without any regard for its workers or to those it provides services [to] through its now closed retail branch,” he added.
Frank Conway, director of the Irish Mortgage Corporation, said the decision was not unexpected.
“The bank has effectively been closed for new business in excess of a year so there has been some concern whether or not the bank could return to full lending in light of developments in the UK and the intervention by the government there,” he said.
“Bank of Scotland entered the Irish market in late 1999 with a hail of glory through the broker channel and with competitive mortgage deals that turned the Irish banking sector on its head.
“At the time, they undercut their Irish rivals with variable-rate mortgage deals that were about 1 per cent cheaper than domestic bank offers.”
Mr Conway added that other banks had followed suit, only to find that such mortgages were unsustainable. “It is ironic that Bank of Scotland (Ireland) today offers the most expensive deals in the market.”
He said Bank of Scotland (Ireland) had prompted “a period of intense competition for market share” in the Irish market and there was a fear its closure might result in a lack of competition in the sector.
