Cantillon: Ulster Bank restructuring not as it first seemed

The manner in which the information relating to the restructuring of Ulster Bank in Ireland was handled on Tuesday caused a stir.

The news initially emerged following a presentation to investors with word spreading like wildfire that 1,800 staff were to go and 50 branches to close. This was initially thought to be on top of already-announced cuts by the bank.

It drew a furious response from the Irish Bank Officials Association's chief executive Larry Broderick. "We are appalled by both the scale of the cuts being proposed and the manner in which they have been communicated," Broderick said on Tuesday evening.

“Our members are absolutely disgusted at the drip-feeding of this confused mixture of proposals that have not even been discussed – never mind agreed – in relation to branch closures and demoralising speculation about further job losses. This is no way for any decent employer to treat staff.”

The bank subsequently clarified that 950 staff would be leaving the company on redundancy terms, as per an announcement in January 2012. In addition, another 350 or more positions might go by way of natural attrition, not redundancy.

A number of these positions would relate to the management of its problem loans and it makes sense that as these arrears cases are worked through, staffing levels in these sections will decline.

It was also revealed that 40 branches will close, including the 22 announced by the bank some time ago.

So the restructuring was not anything like as bad as first thought.

Yesterday morning, Broderick had “noted” Ulster Bank’s “belated attempt to clarify some of the confusion around its future strategy in terms of further branch closures and job losses”.

While the IBOA and some media outlets and commentators might have gotten themselves into an unnecessary and premature lather, Ulster Bank did not cover itself in glory in how it “managed” this news. There are lessons to be learned all round.