Belfast Telegraph

Sunday 20 April 2014

Overhaul of Republic's system is no surprise

And so it goes on. AIB's announcement that it is to axe 2,000 jobs after reporting a loss of over €10bn last year has come as a further body blow to the Republic's ailing banking system.

Executive Chairman David Hodgkinson's pronouncement that the bank needs to 'slim down' is spot on, if a little late. The job losses are to be spread across AIB's operations in the Republic and in Northern Ireland through its First Trust arm and the executive chairman hopes most of them will be by voluntary redundancies.

With luck, that will be the case as it would help ease the gloom that has enshrouded Irish-owned banks over the last couple of weeks.

Bank of Ireland is already working through a previous plan to cut 750 jobs out of certain 'targeted business' and has found half that number have come forward for its voluntary package.

Encouragingly, Bank of Ireland is not expected to announce any additional job cuts this year. Meanwhile, the merger of Anglo Irish Bank and Irish Nationwide will shed 300 jobs but redundancies from putting the two together are eventually expected to be much larger. And job losses at Irish Life -amp; Permanent are also expected.

Not great news but under the circumstances, pretty much expected after the stress test results were announced last week.

We can only hope these events become a line in the sand and once the slimming down has been complete, a fitter - and ultimately more efficient - banking system will take shape.