Permanent TSB has announced a voluntary redundancy programme to staff, prompting speculation that it could see hundreds of employees depart the smallest of the three remaining Irish retail banks as it seeks to cut costs.
It follows a redundancy package for senior Permanent TSB (PTSB) managers which was put in place two months ago. That aimed to cut about 20 positions to improve what the lender called “organisational effectiveness”.
A spokeswoman for PTSB, which has added more than 850 jobs since the end of 2019 to bring the total full-time equivalents to about 3,240, declined to say how many jobs the bank aims to cut under the wider programme, which will be open to applications until January 10th.
The bank, which is led by chief executive Eamonn Crowley, aims to communicate the outcome of the process at the end of February, it told staff in an email seen by The Irish Times.
“PTSB is broadening out the scope of a recently announced voluntary redundancy scheme in light of expressions of interest from employees,” the spokeswoman said.
“Following a period of transformational growth, the bank is now undertaking a number of important strategic business transformation change initiatives to enable its strategy and improve organisational effectiveness and efficiency. These initiatives will ensure that the bank’s business model is both robust and sustainable into the future.”
John O’Connell, general secretary of the Financial Services Union (FSU), criticised the move as an “insensitive and a devastating blow for consumers and staff” just weeks before Christmas.
[ PTSB eyes cost cuts as interest rates fall faster than expectedOpens in new window ]
“There has been no discussion with the FSU around this announcement and no signal to the staff that a redundancy programme was imminent,” he said.
“To announce this a few short weeks before Christmas is upsetting for staff and shows poor judgment from the bank.”
PTSB took on about 330 staff from Ulster Bank over the past two years as it acquired a total of €6.75 billion of loans and 25 bank branches from the UK-owned lender that is exiting the market. It has also retained a number of employees who were initially hired on temporary contracts during the same period to help with the transfer of customers moving current and savings accounts from Ulster Bank and Belgian-owned KBC Bank Ireland.
PTSB indicated in a trading statement in October that it planned to take a fresh look at ways to cut costs to “protect and grow” profitability as it grapples with interest rates that are falling at a faster pace than it had expected.
The bank’s net interest margin narrowed over the first nine months of the year, as it was forced to compete on mortgage rates to rebuild its market position and pay more for deposits.
The margin – the difference between the average rates at which it funds itself and lends on to customers – narrowed by 0.08 of a percentage point year-on-year to 2.23 per cent. PTSB said the margin will decline to 2.2 per cent by year-end, marking a downgrade from the 2.25 per cent rate forecast at the start of the year.
PTSB’s running costs equated to 66 per cent of income last year, well above ratios of 39 per cent and 42 per cent posted by AIB and Bank of Ireland respectively, even as the bank benefited from a surge net interest income with the purchase of those loans from Ulster Bank.
While PTSB had previously targeted a ratio of 55 per cent in 2025, it backed away from this earlier this year and set a target of 60 per cent for 2026.
PTSB’s shares have fallen more than 13 per cent so far this year, while AIB has advanced 39 per cent and Bank of Ireland has edged almost 6 per cent higher.
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