The Bank of Ireland has sold its Bristol and West branch network and deposit business to Britannia Building Society on Tuesday in a deal worth £150 million. This is the "first re-mutualisation of a former building society."
Britannia Building Society will now takeover the 97 B&W branches owned by Bank of Ireland along with 850,000 customers and deposits of £4.5 billion. It is expected that 1,000 Bank of Ireland employees are also set for transfer. Roy Keenan, chief executive of Bank of Ireland's UK financial services, reveled, " The sale will probably complete in the autumn, probably around October, at that stage as well as all customers transferring to Britannia, all staff will transfer and there will be no compulsory redundancies."
Neville Richardson, chief executive of Britannia, said, "We are bringing a new word [remutualisation] into the dictionary." Britannia will also need to bring in a new name for the business as the Bank of Ireland has chosen to hang on to the B&W name under which it hopes to sell mortgages through intermediaries.
The Bank of Ireland had purchased Bristol & West in 1997 for £600m. That was the year, which saw demutualisation of building societies like Halifax, Woolwich and Northern Rock. This sale therefore is a loss to the Irish bank though it maintains that it would make a profit of £90m, which would feed through into its results for 2006.
Meanwhile, it is estimated that Britannia's profits will take a dip for two years as a result of spending £40m on upgrading branches.
Neville Richardson added, "We have a commitment to maintaining an extensive branch network and believe that these branches are capable of a higher level of service and sales to our members. We expect to invest around £40m in integrating these branches." He added that although a small number of jobs would be lost but there would be no compulsory redundancies which is indeed good news for the transferring employees.
Posted
on : Thu, 26 May 2005 17:55 GMT | Banking News
By : Mark Richardson
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