THE State owned ICC Bank has introduced a voluntary redundancy and an early retirement schemes to reduce staff numbers by about 30 - or 10 per cent of the total - over two years. The bank has 290 full time employees and about 30 contract or temporary staff.
Confirming the schemes, ICC chief executive Mr Michael Quinn said they were launched following a review and were aimed at reducing costs and improving efficiency. "I do not know of any financial institution that is not striving to increase efficiency. We need to do this because industry margins are falling in competitive markets," he said.
ICC was aiming to reduce its cost/income ratio to below 50 per cent from a level of about 52 per cent, he said. The cost of the schemes would be included as a provision against profits in the bank's accounts for the year to the end of October. While the cost of the schemes cannot be fully determined in advance of seeing the mix of applications, Mr Quinn said the bank expected to recoup the cost over two to three years in lower operating costs.
ICC has offered employees redundancy terms of seven weeks pay per year of service, capped at a maximum payment of two and a half years salary. Terms for employees opting for early retirement and the timing of their departure will be negotiated individually, it is understood. Those opting for early retirement must be 48 years old on or before October 31st, 1996. The normal retirement age at ICC is 65. The deadline for applications under the schemes is March 31st, 1997.
Union sources said ICC was looking for about 15 redundancies/early retirements at non managerial level and about 15 at managerial level. The schemes were not being offered to lending executives, the source said. The terms have been approved by the Department of Finance.
ICC Bank's current financial year lends on October 31st. The bank reported a 6 per cent rise in first half pre tax profits to £5.9 million. Profit growth slowed from a rate of 14 per cent in the year to the end of October 1995, due to the introduction of a new general provision for bad debts of £500,000.
ICC concentrates on loans and other products for the small and medium sized business market, venture capital and Business Expansion Funds. This market has become more competitive as other financial institutions target niche lending opportunities.
In a buoyant economic environment demand for loans from the manufacturing, tourism and property sectors is strong. But margins or profits on lending are narrowing.
The ICC offer to staff comes as conciliation talks continued between the State owned ACCBank and unions representing staff on increasing efficiency and introducing performance measurement systems.
Over two years ago, the Government considered merging ICC with ACCBank as part of its plan to form a strong State owned third banking force, which could link up with the TSB Bank and An Post.
But that plan ran into difficulties when ACC expressed reservations and the TSB trustees asked the Government to approve a bid for the bank from the National Australia Bank.
Following the bid for TSB and other expressions of interest in that bank, the Government decided to reconsider the future of all the banks. However, no agreement has yet been reached at political level about the sale of TSB and the future of the State owned banks.
Last April, the newly appointed chairman of ICC general secretary of the IMPACT trade union, Mr Phil Flynn said that the form any third banking force would take was a political question requiring a political answer".
