Lloyds Banking Group will shut its business in Ireland by the end of the year to draw a line under Halifax Bank of Scotland's reckless expansion in the once-booming republic.
Lloyds will transfer Bank of Scotland's Irish corporate banking business to the UK and the business will give up its banking licence. The bank will set up a separate management company to deal with customers and manage the £25bn of loans as they are wound down.
The Unite union said 36 employees would lose their jobs immediately and that the fate of 800 other workers was "clouded with uncertainty" by the inevitable shrinking of the business.
Lloyds declined to comment on the short-term cuts but said those that remained would keep their terms and conditions and that natural turnover would help absorb future job losses.
Lloyds said it had decided to get out of Ireland because there was "little opportunity for scalable growth". Lloyds inherited the Irish business when it bought HBOS in early 2009 to save it from collapse.
The pull-out reverses HBOS's move – made with much fanfare early in the last decade – to compete for business in Ireland. At the time James Crosby, then chief executive, said he could take on Bank of Ireland and Allied Irish Banks because they were as complacent as the big UK banks. But HBOS followed the now-stricken Irish lenders into the country's overheated property market and racked up big losses on commercial real estate. Bad debts in the Irish business rose to £1.56bn in the first half of the year, from £1.03bn a year earlier.
The bank has already decided to shut Halifax's 44 branches in the republic and cut 750 jobs. Lloyds' business in Northern Ireland will not be affected.Reuse content