Friday, October 25 10:51:38
ACCBank announced plans today to hand back its banking licence and withdraw from providing standard banking products, such as deposit accounts and current accounts, and to focus solely on debt recovery.
During 2014, the bank will close all its business centres to the public and intends to give up its banking licence.
As part of the restructuring the Bank will also initiate a cost reduction programme through a voluntary-led severance programme, which will see a reduction of up to 180 employees, from approximately 470 at present.
It will however continue to be a regulated entity and will support its customers in the agriculture sector, given its strong heritage in this area. All funds on deposit with the Bank will be repaid in full.
Importantly, there will be no changes to the businesses of Rabobank Ireland plc, which continues to have a strong position in the food and agri sector, and RaboDirect, two other operations of the Rabobank Group in Ireland, and they will continue to operate as usual with no impact on their customers or businesses as a result of this restructuring.
Commenting on the decision, Kevin Knightly, Country Manager, said: "ACCBank has incurred significant losses since 2008 due to the deterioration of the Irish property market. While costs have been cut significantly, including a substantial restructuring programme in 2009, we are heading towards a situation where, without intervention, our costs will exceed our income during 2014. This is an unsustainable position and we need to take action now."
He added: "ACCBank has remained at the forefront of loan recovery activity in the Irish market. We will continue with our approach to loan recovery but do not need to be a fully licensed bank for this purpose."
As part of the changes, ACCBank is exploring the possibility of outsourcing a small portion of its loan book, excluding agricultural loans. Capita has been selected as the preferred service provider.