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Bank of Ireland Group to Exit Corporate Lending in Great Britain, Impacting 40 Employees

Bank of Ireland to phase out its €2 billion corporate lending in GB, impacting 40 employees, amid strategic focus shift.

By Mackenzie Crow

5/15, 04:49 EDT

Key Takeaway

  • Bank of Ireland Group Plc to exit corporate lending in Great Britain, affecting 40 employees, as part of a focus on higher-return areas.
  • The bank's UK strategy includes maintaining Northern Ireland operations and not impacting UK property finance activities.
  • Wind-down of over €2 billion loan book within 36 months reflects strategic shift towards more profitable sectors.

Strategic Retrenchment

Bank of Ireland Group Plc has announced its decision to wind down its corporate lending operations in Great Britain, a move that will affect approximately 40 employees in London and Manchester. This decision is part of a broader strategy to focus on areas with the potential for enhanced returns. The bank's decision, reported on May 15, 2024, aims to phase out its existing corporate and commercial loan book, valued at over €2 billion, within a 36-month period. This action aligns with the bank's previous steps to streamline its UK operations, including ending its financial services partnership with the AA and ceasing the provision of unsecured personal loan products under the Bank of Ireland UK and Post Office brand in December 2023.

Focused UK Presence

Despite the retrenchment, the Bank of Ireland emphasizes that the UK remains a crucial part of its overall footprint. The bank's corporate lending business in Northern Ireland and its UK property and leverage acquisition finance activities will not be impacted by this decision. Over the past four years, the group's UK retail loan book has seen a 30% contraction, reflecting a strategic shift away from the mass mortgage market and personal lending. However, the bank has continued to focus on bespoke, higher-return home loans offered through brokers, contributing to a 57% increase in the UK division's underlying pretax profit from 2019 to last year.

Employee Impact and Future Strategy

The wind-down process will directly impact 40 Bank of Ireland employees in London and Manchester, with the bank offering options for voluntary redundancy or potential redeployment within the group. This move is part of a broader strategy to invest in areas with greater potential for enhanced returns, both in Great Britain and across the group. Gavin Kelly, chief executive of the group’s corporate and commercial banking division, communicated the decision to staff, highlighting the bank's focus on long-term sustainable returns as a key factor in this strategic shift.

Management Quotes

  • Bank of Ireland Group Plc:

    "By being more purposeful and strategic about what we offer in the UK we have transformed the performance of our businesses in recent years... This latest step continues with this successful strategy, and the proposal will allow us to invest further in areas with greater potential for enhanced returns, both in Great Britain and across the Group."