NIB to shut branches as pain goes on

City A.M. Reporter
LOSS-making National Irish Bank (NIB), owned by Denmark&rsquo;s Danske Bank, yesterday said it is to shut 25 of its 58 branches and eliminate 150 jobs to cut costs.<br /><br />Irish banking has proved a headache for Danske Bank, piling up losses before tax of 3.7bn Danish crowns (&pound;449.3m) in the first nine months of 2009 on heavy loan writedowns stemming mainly from a property bubble.<br /><br />NIB said in a statement yesterday that the branches would be closed and merged into neighbouring branches.<br /><br />&ldquo;Staff numbers will fall by 150 through a voluntary severance scheme,&rdquo; NIB said.<br /><br />&ldquo;The banking sector in Ireland is on life support,&rdquo; said chief executive Andrew Healy. &ldquo;Banks have to react by reducing costs and amending their business models.&rdquo; <br /><br />The restructuring comes, NIB said, &ldquo;against the backdrop of continuing recession and sweeping changes to the financial services landscape in Ireland&rdquo;.<br /><br />It said customers could be reassured that NIB remains part of Danske Bank, which is covered by the Danish government guarantee scheme announced in October 2008.<br /><br />Meanwhile, central bank governor Patrick Honohan said Ireland&rsquo;s banks will emerge from the financial crisis with their capital base repaired and in a shape that will attract strong private investment.<br /><br />&ldquo;The Irish banks are going to leave this situation well capitalised, solid ... with adequate capital to convince the market that they are going ahead on their own steam,&rdquo; Honohan said after he had given a speech on financial innovation.