Some 25 employees currently work in the IoM branch of the bank, which celebrated its 30th anniversary on the island in 2011.
In a posting on the bank’s website today, intended for its customers, the BoI said its decision to leave the Isle of Man followed a strategic review, and that it was currently engaged in a consultation process with its employees on the island.
The posting added: “As a result of this decision, the bank is no longer accepting any new deposits or new customers… While there will be no immediate change to your terms and conditions, all customers will be contacted in the next few weeks with more details on how this will impact them.”
In a follow-up statement, the bank added: “The closure of Bank of Ireland (Isle of Man) comes as a result of a commercial decision by the Group to concentrate on restoring and strengthening its core businesses in UK and Irish markets.
“The Isle of Man subsidiary is solely a deposit gathering operation in offshore savings. Given an industry-wide decline in demand for offshore banking, the Group no longer sees this market as being a core deposit focus in the future for the bank.”
The statement emphasised that the decision to close BoI’s subsidiary operations on the Isle of Man would not impact the bank’s wholly-owned UK subsidiary, Bank of Ireland UK.
Irish bank closures
The Bank of Ireland’s move to close its IoM operation comes in the wake of other Irish bank contractions, such as that of Allied Irish Bank. As reported, Allied Irish announced plans to close its Jersey and Isle of Man branches by the end of this year, as part of an overall plan to become “smaller and more domestically focussed”.
Irish banks faced huge losses after property prices began to tumble in 2008, pushing some lenders into state hands, closing others and eventually seeing the government seek a EU/IMF bailout.
AIB Jersey & Isle of Man chief executive Joe Moynihan attributed the IoM and Jersey closures to “the ongoing uncertainty in financial markets since 2009, which has had implications for the business and created difficulties that challenge the viability of the offshore business model for AIB”.
Earlier this month BoI chief executive Richie Boucher said that the 15% state-owned lender was anticipating gradual recovery this year, but he warned that “it’s never going to go in exactly a smooth path”.
The Isle of Man became the headquarters of BoI’s offshore operations in 2005.
