Bristol & West, one of the UK's oldest financial services brands, closed to new business yesterday, bringing to an end more than 150 years of trading for the former building society.
The closure could result in the loss of up to 600 jobs in Reading and Solihull, although the company's owner, Bank of Ireland, said yesterday that it would do everything it could to mitigate redundancies.
Bank of Ireland bought Bristol & West in 1997, but eventually sold its 97 high-street branches to the Britannia Building Society in 2005. The brand lived on in the intermediary mortgage market, recording half-year pre-tax profits of £52m as recently as last year. Since then, conditions in the credit markets have continued to deteriorate, and at the end of last month, Bank of Ireland was one of six Irish banks to be helped by a new government bail-out package. The Irish government now owns 8 per cent of the company's core tier one preference shares, giving it 25 per cent of the voting rights in respect of director appointments. It also made €1bn (£890m) of new capital available to the business.
Although all of Bristol & West's products closed to new business yesterday, the Bank of Ireland insisted that the brand would stay in place for existing mortgage customers for the time being, but would disappear as existing clients came to the end of their current deals.
Claire Gorman, a spokesperson for the Bank of Ireland, said: "All existing customer and pipeline intermediary mortgage business will continue to be processed under both the Bank of Ireland and Bristol & West Mortgages brands. Bristol & West Property Finance will also continue to operate under the Bristol & West brand.
"Essentially both our UK mortgage brands have converged over recent months and it is not effective to operate two mortgage brands at current levels of business. The Bank of Ireland brand is the core brand of Bank of Ireland Group and we propose to conduct all new customer mortgage lending under this brand."
The Bank of Ireland's only remaining UK mortgage business will now be conducted via its joint venture with the Post Office, and through its 44 branches in Northern Ireland. As well as mortgages, the Bank offers a range of savings, credit cards and insurance products via the UK Post Office network. In the six months to 2008, this division delivered the bank a pre-tax profit of around £25m.
In a memo to UK employees of Bank of Ireland this week, the chief executive, Des Crowley, said that the decision to close the intermediary lending business had not been easy. "This has been a difficult decision to make and communicate, however it is absolutely necessary in this unprecedented market," he wrote. "We are very mindful of the impact this will have on the UK business and on the individuals affected."
Bristol & West was founded in 1850, expanding over the 20th century to become Britain's 12th largest building society by the mid-1980s, when it had 164 branches and employed more than 1,000.Reuse content