Permanent TSB to cut 280 jobs

Staff at Permanent TSB are being informed today about the details of planned job cuts at the country’s largest mortgage lender.

The loss-making bank, which also announced a 1 per cent increase in its standard variable mortgage rate today, is seeking to reduce its headcount by about 280 and will offer redeployment opportunities to 100 other staff in response to a shrinking banking market and narrower interest margins on loans.

The job cuts amount to about a fifth of the company's staff.

The company is seeking the redundancies on a voluntary basis at the head office in Dublin and across the lender's 92 branches.

Permanent TSB said no branches will close as a direct result of this programme.

Dave Guinane, chief executive of the lender, said that the bank would seek the redundancies as part of a plan to "secure the future" of the company.

"We have set out a roadmap for the recovery of the bank, and while that impacts on both customers and staff, it is key to the ultimate recovery and success of the bank," he said.  "We're entering a new period for banking in Ireland and we have to ensure that Permanent TSB bank is correctly sized and has the correct margins for the market conditions we are operating in at present."

The company, which employs 1,850 people, has reduced its workforce by about 400 over the past two years through smaller redundancy programmes and by not replacing departing staff.

The Unite trade union said it was a "dark day" for staff, and criticised previous senior management for the situation.

Consultancy firm Accenture carried out a review of Permanent TSB revenue and costs last year.

The lender had planned to make an announcement once a decision had been made on the sale of rival EBS, of which Permanent TSB is one of two final bidders. The company decided to bring forward the redundancy announcement due to the delay in the Government's sale of EBS.

Similar-sized reductions in staff numbers at the main banks, Bank of Ireland and AIB, would lead to a total of about 8,000 job losses across the two institutions.

Larry Broderick, general secretary of the Irish Bank Officials' Association, said that almost 7,000 jobs had been lost at the banks since the autumn of 2008 and at least 2,000 more would be cut "in the near future".