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Bank of Ireland to reduce branch network by almost half

Bank of Ireland is latest bank to pin its future on digital channels as customers change their banking habits

Bank of Ireland is shutting about 100 branches as customers migrate to digital banking channels during the Covid-19 pandemic.

The bank said it was closing more than 80 branches in Ireland, taking its network down to 169, while in Northern Ireland the network will be reduced by 15 to leave just 13.

Bank of Ireland CEO Francesca McDonagh said there had been a move to digital channels by many customers in recent years, with customers using branches less and less.

“Covid-19 has accelerated this changing behaviour and we’ve seen a seismic shift towards digital banking over the past 12 months,” she said.

The bank has reached a tipping point in online and offline banking, said McDonagh. “That’s why we’ve also announced changes to our branch network in Ireland and Northern Ireland.”

The bank said it had put in place an agreement with the Irish postal service, An Post, which through its branch network will ensure access to banking services for those who need to visit a bank in person but no longer have one locally.

“We’ve seen a seismic shift towards digital banking over the past 12 months. That’s why we’ve announced changes to our branch network”
Francesca McDonagh, Bank of Ireland

Speaking on Irish radio station RTE Radio 1, McDonagh said there would be no compulsory redundancies as a result of the branch closures, although 200 staff would be affected. She said the closures would start in September.

The bank has targeted costs to be less than €1.65bn in 2021 and €1.5bn in 2023, but the branch closures “were not a cost take-out”, McDonagh told RTE Radio 1. “This is about putting our resources in, investing, where our customers want to bank with us. Even two years before the pandemic, the number of people visiting branches was down by a quarter.

“In the past 12 months, [branch visits have] gone down by half, and are over 60% down in the branches we’re closing. In direct contrast, we’ve seen a massive pick-up in digital usage, including really good take-up of our new mobile app,” she said.

Bank of Ireland is not alone in announcing branch closures in response to the growing popularity of digital banking in the pandemic. Hundreds – probably thousands – of branches have been earmarked for closure by multiple banks in recent months.

When HSBC announced the shuttering of 82 branches, it said the Covid-19 pandemic had “crystallised” its “thinking” in terms of reducing reliance on its branch network to serve customers.

TSB announced it would close more than 150 branches this year, with almost 1,000 jobs to go.

In the UK, the financial regulator is concerned about banks closing branches during the current health crisis. The Financial Conduct Authority (FCA) said it had been informed by some banks and building societies that they were “either going ahead with branch closures already announced or announcing new branch closures during the current lockdown”. 

“We are concerned that these activities could have significant consequences for customers. It may be harder than usual to reach all customers under the current restrictions and engage with them on closure proposals effectively – for example, small businesses that are temporarily closed,” said the FCA.

“Some customers may need to access in-branch services to help them prepare for closures but may be unable to do so. Customers may also need additional help to access online banking and make payments. We want firms to review their plans against our existing guidance and ensure that they continue to comply with our principles.”

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