Bank of Ireland

Type: Public
On the web: http://www.bankofireland.ie
Employees: 15,868
Employee growth: (1.0%)

Through the troubles and beyond, Bank of Ireland has been a linchpin of the Irish economy since 1783. Once the unofficial bank of the Irish state, Bank of Ireland is now a full-blown financial services provider for consumers and businesses, operating over 250 retail branches in Ireland and the UK, where it offers traditional services such as deposits, loans, mortgages, and insurance. It also offers asset management, corporate finance, and capital markets services at home and abroad. Subsidiary Burdale Financial provides asset-based financing to middle-market businesses in Europe. In 2008 the Irish government injected E2 billion ($2.8 billion) into the bank in exchange for a 25% voting stake.

Key numbers for fiscal year ending March, 2009:
Sales: $5,172.4M
One year growth: (34.9%)
Net income: $44.9M
Income growth: (98.3%)

Officers:
Group Chief Executive and Director; Chief Executive, Retail Financial Services Ireland (RFSI): Richie Boucher
Group CFO and Director: John O'Donovan
Senior Executive Strategy and Business Development: Nick Fahy

Competitors:
Allied Irish Banks
National Irish Bank
Northern Bank

Incorporated: 1783
NAIC: 522110 Commercial Banking; 523930 Investment Advice; 523920 Portfolio Management Companies

The Bank of Ireland is the oldest bank in Ireland. Throughout the turbulent Irish history, the bank has demonstrated remarkable entrepreneurship by taking innovative risks and making them work--from opening a commercial branch in a tiny agricultural community in the 18th century to offering remote offshore banking over the Internet in the 21st century. Their corporate agility and strength has earned them the nickname "the Celtic Tiger" and established them as leaders in the international banking industry and global economy.

The Bank of Ireland opened for business on June 25, 1783, in Dublin, a day that marked a turning point in the financial history of Ireland. Until that point, banking had been handled by private institutions and individuals. The economy had been unstable and money scarce: a combination that devastated many small banks trying to establish themselves. One bank that survived was David La Touche and Son. The founder's grandson, also David La Touche, was elected the first Governor of the Bank of Ireland. Several members of the wealthy La Touche family were the bank's first clients and opened large accounts. Ireland was under British rule, and La Touche was a member of the Irish Parliament. His position helped the Bank of Ireland become appointed as the Official Government Bank. It became their duty to handle all funds coming into or going out of the Treasury Department.

Being the Official Government Bank gave the Bank of Ireland an economic edge over its competitors and helped create an image of security. This was important because the public had not forgotten the banking disasters of the earlier decades. The economy was bad and the majority of people were poor. The small group that did have money, mainly landowners, was very protective of their money and skeptical of banks. The promise of security helped attract some of this public sector. Checkbooks were issued from the bank's beginning; and in 1796, the bank issued personal passbooks to customers. Although the bank's main focus was securing larger commercial accounts, the number of private individual accounts was growing.

In 1784, the Bank of Ireland printed and issued its own paper currency in Irish pound and guinea denominations. The British government had decided to allow six Irish banks to issue their own currency under strict government regulations; the six included the Bank of Ireland, the National Bank, the Ulster Bank, the Northern Bank, the Provincial Bank of Ireland, and the Belfast Banking Company. The Bank of Ireland was the first to take advantage of this opportunity. Soon the other banks followed, and there were six different Irish banknotes as well as English currency being circulated in Ireland. By 1800, circulation of the Bank of Ireland's banknotes was £1.7 million (US $2.1 million).

The bank quickly outgrew its Mary's Abbey location and purchased several small adjoining properties in 1790. It soon outgrew this expansion as well and purchased the Parliament House in College Green in 1803. The Parliament House Building had been vacated when the Irish Parliament was abolished according to the Act of the Union in 1801. This act declared Ireland part of "The United Kingdom of Great Britain." The Irish would no longer have their own Parliament; instead, they would have a member represent them in the English Parliament. The architect Francis Johnson was hired to remodel the building in a manner that would suit banking needs. The result was a very impressive and prestigious headquarters.

Ireland was a country of agriculture. The majority of its people were farmers living in the outskirts and rural areas of the country; and there were no banks in these outlying areas. In 1825, the Bank of Ireland opened seven branch offices for these customers. The new branches, referred to as "agencies," opened in Cork, Waterford, Clonmel, Newry, Belfast, Londonberry, and Westport. Banking was a new approach to money handling for most of these people, and they were apprehensive. But they eventually recognized the value and convenience, and by 1881, the Bank of Ireland had 58 branches in operation.

The 19th century brought disaster to Ireland in the form of the Great Potato Famine (1845-1849). At that time, potatoes were the main, sometimes only, food source for the majority of Irish people. When a potato blight completely destroyed potato crops during those years, the Irish people and the economy suffered enormously. It was estimated that nearly 1 million people died from starvation and disease while another million emigrated in search of a better life. Landowners were left with fields of useless rotting potatoes. Resentment was building toward the English government because while Ireland's people were starving, large amounts of food were being exported untaxed to England. Landowners were left with huge farms they couldn't farm, and farmers did not have the money to buy land. The Encumbered Estates Act in 1849 was created to allow landowners to sell their land even if they did not own it free and clear. This money was collected by the courts and distributed among creditors.

This was an extremely difficult time for banks in Ireland because there was very little money. The Bank of Ireland was fortunate. Because they handled all government financial transactions, they had enough capital to function. The Bank of Ireland made many loans to other banks during the recovery period to help them survive. They also made loans to businesses, including the Dublin Corporation, to help them become reestablished. They could not do much to help the landowners due to a restriction that had been placed on them by the government: they were not allowed to lend money based on the security of land. When this restriction was lifted in 1860, they were in a position to make loans that would help revitalize the agricultural industry. The bank began paying interest on deposits as an incentive. By 1920, their deposit base was at £28 million (US $35.5 million) and loans to customers were £16 million (US $20.3 million).

The beginning of the 20th century was a period of political turbulence. Ireland was still under English rule. Southern Ireland was fighting against both England and Northern Ireland for liberation. Northern Ireland did not want independence from the United Kingdom. The fighting took its toll on the barely recovering Irish economy. The New York Times reported a plunge in the Bank of Ireland's stock from 330 to 302 points in just ten days. There was civil unrest and crime. The Bank of Ireland suffered a loss of £4,000 in two branch robberies. The money was never recovered.

In 1922, Ireland split into the Irish Free State and Northern Ireland. The Irish Free State was given dominion status from England. Northern Ireland was still under English rule. The Bank of Ireland loaned the new Irish Free State government £1 million to help the fledgling organization. Soon after, the Bank of Ireland was appointed the official bank of the Irish Free State government. On February 7, 1922, an historical event marked the new Irish independence: Irish guards replaced the British guards who had guarded the Bank of Ireland's Parliament Building for over a century. In 1923, the Land Commission was established for making property loans. This caused the National Land Bank to suffer great financial difficulties since this had been their main business. In 1926, the Bank of Ireland purchased the failing National Land Bank and renamed it the National City Bank, Ltd.

In 1927, the new Irish Parliament, known as the Dail, passed the Currency Act. This act created the Currency Commission of Ireland whose responsibility was to oversee the issue of a new currency in the Irish Free State. The Currency Commission opened their office in the Armoury Building, which was part of the Bank of Ireland's Parliament Building headquarters. In 1928, the six different banknote series that had been circulated, were abandoned in favor of a single series of legal tender notes appearing in seven denominations and known as the Consolidated Banknote Issue. The Currency Commission also issued a new legal tender series for Northern Ireland known as the Belfast Issue. In Northern Ireland, all six of the earlier banknote series were still being circulated, as well as the new Belfast Issue and English currency. These multiple banknotes were confusing. The Bank of Ireland's banknote issue was greatly decreased during this time. This worked in the bank's favor because people began writing more checks in order to avoid the confusion.

In 1937, The Irish Free State became Eire under a new constitution. Eire declared an economic war against England and continued to strive for complete separation. They took a neutral status during World War II and refused to let England use Irish ports. They focused inward on ways to secure their independence and strengthen their government and economy.

In 1942, the Irish Parliament passed the Central Bank Act. According to this new act, the Central Bank of Ireland replaced the Currency Commission. In 1943, the Central Bank became the official bank of the Irish Government replacing the Bank of Ireland. The Central Bank became the only bank that could issue currency in Eire.

Ireland was once again undergoing political changes. In 1948, John A. Costello was elected Eire's prime minister. A new constitution ensued, and on April 18, 1949, Eire declared complete independence from England and became The Republic of Ireland.

No longer the official bank of the Irish government, the Bank of Ireland worked to expand and strengthen their position in the newly formed republic. They began acquiring interests in other banks and enterprises. In 1958, they acquired the Hibernian Bank Ltd. In 1965, they purchased the Irish shares of National Land Bank Ltd. and renamed it the National Bank of Ireland. This was a significant event. Daniel O'Conner established the National Bank in 1835 as a joint-stock venture. The bank's head office was in London, but its banking activities were mainly in Ireland. The majority of the bank's backers were English, and it was one of England's larger banks. This made it difficult to function considering the animosity and division between The Republic of Ireland and England. Since it was officially an English company, the tax on profits went to Britain, even though most of those profits came from transactions in Ireland. When the Bank of Ireland bought the Irish shares, the tax profits went to the Republic of Ireland's Treasury department. The National Commercial Bank of Scotland purchased the British shares.

The Bank of Ireland also focused on globalization. In 1970, the Bank of Ireland opened an office in London soon to be followed by offices throughout the United Kingdom. In 1997, they acquired Bristol & West, a large U.K. building society (equivalent to a savings and loan), and the New Ireland Assurance, one of Ireland's largest life insurance companies. By 2002, the bank operated over 250 retail branches in the Republic of Ireland and the United Kingdom. The Bank of Ireland also had businesses in Australia, Canada, Germany, Japan, and the United States.

In order to handle the rapid growth, the Bank of Ireland went through a radical restructuring and became The Bank of Ireland Group. This group was divided into four major divisions: Asset and Wealth Management, Corporate and Treasury, Retail, and Other.

The Asset and Wealth Management division was also called Bank of Ireland Asset Management (BIAM). It provided fund management services concerning pension funds for large institutions on a global level in the United States, Canada, Japan, Australia, and Germany. They also managed investments and global securities at home and internationally. The Corporate and Treasury division was subdivided into three business units: Treasury, International Financing, and Corporate Banking. The Treasury unit's main function was to manage the group's Irish government securities portfolio, as well as any trading in Irish gilts, foreign exchange, and interest rate markets. They also offered foreign exchange, deposit, loan, and bond services to wholesale, corporate, and financial institutions. The International Finance unit offered international asset financing, provision of structured financial transactions, and loans to multinational companies. The Corporate Banking unit made loans to large corporations on a global level.

The Retail division was subdivided into five units: Branch Banking, Building Society, Business and International Banking, Insurance and Retail Business, and Northern Ireland. Branch Banking provided traditional banking services such as deposits, loans, and checking accounts. The Building Society specialized in mortgages, savings, and investments. Business and International Banking consisted of four subunits: International Banking, Current Asset Financing, Bureau de Change, and International Consultancy. International Banking dealt with international trade and currency. Current Asset Financing provided loans secured by various assets. Bureau de Change offered foreign exchange services in major tourist areas. International Consultancy provided support and training to overseas financial institutions.

The Insurance and Retail Business unit was divided into eight subunits: Life Assurance, General Insurance, Installment Credit Leasing, Credit Cards, Direct Banking, Consumer Lending, E-business and Payments, and Payments and Electronic Banking. Life Assurance offered life and pension products while General Insurance offered a more general range of insurance products. Installment Credit Leasing dealt in industrial banking, installment credit, and commercial mortgages. Credit Cards provided merchant services and issued MasterCards and Visa cards. Direct Banking provided telephone-banking services. Consumer Lending, E-business and Payments, and Payments and Electronic Banking dealt with those specific services. Northern Ireland focused on the banking products and services.

The Other Group division contained five units: BOIe, Security Services, Trust Services, Corporate Finance, and Stockbrokering. BOIe was the e-commerce unit and consisted of six subunits: Business On Line, Clikpay, BOInet Internet Training, Banking 365 Online, Fsharp, and Set Up Online. Business On Line offered online banking for business customers. Clikpay was an online credit-card payment service. BOInet Internet Training taught courses in using the online services. Banking 365 Online offered online banking to retail customers in Great Britain. Fsharp provided online services to customers living and working abroad. Set Up Online was an e-commerce service education provider. The Security Services unit specialized in safekeeping of domestic and international involvements. Trust Services provided management of trust accounts. Corporate Finance advised companies on mergers, takeovers, restructurings, and other financial matters. Stockbrokering provided investment strategies and services to institutional and private investors.

In January 2002, Ireland saw yet another change in its currency. The long-anticipated switch to the new standard currency known as the Euro became official. The change was made to simplify the European currency system and promote commerce between European countries. The 12-state members that converted to the Euro were Belgium, Germany, Luxembourg, Greece, Spain, France, Ireland, Italy, Finland, Portugal, Austria, and the Netherlands. The Bank of Ireland and its customers were well prepared when the changeover took place.

The success of e-banking and e-commerce made virtual banking a viable way for individuals and businesses to conduct banking. A connection between countries was just a click away. The use of different currency systems made this type of commerce and trade confusing. The Euro implementation was viewed as a major step toward globalization. In order to continue as a strong force in the banking industry, the Bank of Ireland had to keep current on the new technologies and be able to implement them in a manner that would service their individual customers as well as their large corporate accounts, not only in Ireland but throughout the rest of the world as well.

Principal Divisions

Banking 365; Bank of Ireland Asset Management (BIAM); Bank of Ireland (BOI) Treasury; BIAM Ltd.; BOI Commercial Finance Ltd.; BOI Corporate Banking; BOI Credit Card Services; BOIe, Business On Line; BOI Finance; BOI International Services Ltd.; BOI Internet Training; BOI Trust Services; Bristol & West, International Banking; Clikpay; Fsharp; IBI Corporate Finance Ltd.; ICS Building Society; First Rate Bureau de Change; International Finance Services; J&E Davy Holdings Ltd.; Lifetime Assurance Co. Ltd.; New Ireland Assurance Co. PIC.

Principal Competitors

Allied Irish Bank; Anglo Irish Bank; Royal Bank of Scotland.

Further Reading

"Banking in Ireland. Business, Bank Deposits, Loan and Harvests during a Civil War," New York Times, February 25, 1921, p. 24.

Blanden, Michael, "Celtic Tiger on the Prowl," The Banker, February 1995, p. 35.

"Building Societies in Turmoil," The Banker, May 1996, p. 10.

"The Central Bank," Central Bank of Ireland, accessed March 15, 2002, http://www.centralbank.ie.

"Chapter 9: Bank of Ireland," Tithe an Oireachtas, accessed April 3, 2002, http://www.irigov.ie.

"Debate on the Treaty between Great Britain and Ireland, signed in London on the 6th December 1921:Sessions 14 December 1921 to 10 January 1922," CELT, accessed April 6, 2002, http://imbolc.ucc.ie.

Dougherty, Joseph, "Central Bank of Ireland," New York University School of Law Web site, accessed March 15, 2002, http://www.law.nyu.edu.

"Due to Fear of Home Rule," New York Times, September 20, 1906, p.1.

"Encumbered Estates Act 1849," Public Record Office of Nothern Irleand, accessed April 4, 2002, http://proni.nics.gov.uk.

"The Great Famine in Ireland, 1845-1849," Ireland, accessed April 6, 2002, http://www.ireland-information.com.

"Ireland," Irish Paper Money, accessed March 28, 2002, http://irishpapermoney.com.

"Irish Dail Meets Today for Budget," New York Times, February 28, 1922, p. 2.

"Irish State Gets Loan of 1,000,000," New York Times, January 19, 1922, p. 17.

"The National Bank Ltd.," The Royal Bank of Scotland, accessed April 8, 2002, http://www.royalbankscot.co.uk.

"National Bank of Ireland Limited," Debates of the Houses of Oireachtas, accessed April 6,2002, http://www.oireachtas-debates.gov.ie.

"Welcome to Bristol & West," Bristol & West, accessed April 10, 2002, http://www.bristol-west.co.uk.

— Peggi Swan Skjelset

Governor and Company of the Bank of Ireland

Type	Public company
Founded	1783
Headquarters	Dublin, Ireland
Key people	Pat Molloy, Governor, Richie Boucher, CEO
Industry	Finance
Products	Banking & Insurance products
Revenue	▲ €3.957 billion (y/e 31 March 2009)
Operating income	▼ €7 million (y/e 31 March 2009)
Net income	▲ €69 million (y/e 31 March 2009)
Employees	15,868 (31 March 2009)
Website	www.bankofireland.com

The Bank of Ireland (Irish: Banc na hÉireann) (ISEQ: BKIR. LSE: BKIR, NYSE: IRE) is a commercial bank operation in Ireland, which is one of the 'Big Four' in both parts of the island.

Historically the premier banking organisation in Ireland, today Bank of Ireland is number two to Allied Irish Banks. The Bank occupies a unique position in Irish banking history. At the core of the modern-day group is the old Bank of Ireland, the ancient institution established by Royal Charter in 1783.

The Bank of Ireland should not be confused with the Central Bank of Ireland, as it is a commercial bank and not the Irish central bank, as its name might suggest.

Contents 1 History 1.1 Chronology of history to 1990 1.2 Role as government banker 1.3 Headquarters 1.4 Recent history 2 Banking services 2.1 Republic of Ireland 2.2 International Operations 3 Banknotes 4 Controversies 4.1 Michael Soden 4.2 DIRT Controversy 4.3 Stolen laptops 4.4 Record bank robbery 5 Sports sponsorship 6 2008 share price collapse 7 References 8 External links

History

Bank of Ireland is the oldest bank in continuous operation (apart from 4 closures due to bank strikes, 1950, 1966, 1971, 1976) in Ireland.

Chronology of history to 1990

• 1719 ...Abortive attempt to establish a bank to be called "Bank of Ireland". Another abortive attempt 2 years later
• 1782 ...The bank was formed by an Act of the Irish Parliament in 1782 to support public and commercial finances in Ireland.
• 1783 ...25 June 1783, the Bank of Ireland opened for business at Mary's Abbey (Off Capel St., Dublin) - now on the route of the Luas Tram (Red Line) - in a private house previously owned by one Charles Blakeney. 12700 banknotes were issued with a total value of £882,500
• 1785 ...First forgeries of Bank of Ireland notes identified. Forgery became extensive in subsequent years.
• 1787 ...March 2 1787, the bank suspended cash payouts during a banking crisis
• 1808 ...June 6 1808, Bank of Ireland moved to 2 College Green. This building had been the parliament building until the Act of Union 1800 abolished the Irish Parliament. The Irish House of Commons had been damaged in a fire, and considerable modifications were made to this area before opening as a bank. (The Irish House of Lords was preserved, and remains to the present day, despite the fact that a statue of Queen Victoria was removed.)
• 1820 ...Bank of Ireland weathered one more of many banking crises - but many other banks fail.
• 1825 ...Bank of Ireland opened its first branch - in Cork. Six other branches were opened later in that year.
• 1835 ...Bank of Ireland introduced the overdraft - previously, all lending was by discounting of bills.
• 1847 ...Major banking crisis following the Great Irish Famine
• 1857 ...Another banking crisis
• 1864 ...Bank of Ireland first pays interest on deposits
• 1886 ...Bank of Ireland first disclosed its accounts and balance sheet. Gross Profit was £220,681-9-5d. Total assets were £16,142,797-14-0d. There was another banking crisis, and a major bank failure - Munster Bank Ltd. Munster & Leinster Bank - now included in AIB was formed from the entrails.
• 1914 ...190 staff members joined the army and saw service. 32 did not return.
• 1919 ...Irish banks recognise the Irish Bank Officials Association (IBOA), a banking union formed 2 years earlier
• 1926 ...The Bank of Ireland Crest, originally applied for in 1783, was eventually granted. The Bank of Ireland took control of the National Land Bank - a friendly society. Following restructure as a limited company, it was rebranded as National City Bank Ltd.
• 1929 & 1935 Legislation to reform the corporate structure of Bank of Ireland - Limited liability introduced
• 1948 ..."The Bank of Ireland 1783-1946" by F.G. Hall was published jointly by Hodges Figgis (Dublin) and Blackwell's (Oxford)
• 1950 ...Irish banks closed for 7 weeks due to a strike by members of the Irish Bank Officials Association. Other total closures in 1966, 1971, and 1976
• 1956 ...The Bank was authorised to operate the Prize Bond scheme, on behalf of the government, and continued to do so until 1989.
• 1958 ...The Bank took over the Hibernian Bank Limited
• 1965 ...The National Bank Ltd, a bank founded by Daniel O'Connell in 1835 had branches in Ireland and Britain. The Irish branches were acquired by Bank of Ireland and rebranded temporarily as National Bank of Ireland, before being fully incorporated into Bank of Ireland. The British branches were acquired by Williams & Glyn's Bank.
• 1983 ...Bank of Ireland Bi-Centenary. A commemorative stamp was issued. The Bank commissioned the publication of "An Irish Florolegium"

From the beginning, it was connected closely with the leading banking family in Dublin, the Huguenot la Touche family. A member of that family - David La Touche - was the first Governor.

Role as government banker

The Bank of Ireland is not, and was never, the Irish central bank. However, as well as being a commercial bank - a deposit-taker and a credit institution - it performed many central bank functions, much like the earlier-established Bank of Scotland and Bank of England. The Bank of Ireland operated the Exchequer Account and during the nineteenth century acted as something of a banker of last resort. Even the titles of the chairman of the board of directors (the Governor) and the title of the board itself (the Court of Directors) suggest a central bank status.

From the foundation of the Irish Free State in 1922 until 31 December 1971, the Bank of Ireland was the banker of the Irish Government, but was not the central bank. This function was fulfilled by the Currency Commission, which was later superseded by the Central Bank of Ireland in 1943.

On 20 March 2005, Bank of Ireland announced 2,000 job cuts in a move to reduce its cost base, this coming despite profits in excess of €1 billion for that financial year.

Headquarters

Facade of the bank on Westmoreland Street, Dublin

The headquarters of the bank until the 1970s was the impressive Bank of Ireland building on College Green, Dublin. This building was originally designed by Edward Lovett Pearce in 1729 to host the Irish Parliament, and it was the world's first purpose-built two-chamber parliament building.^{[citation needed]}

The bank had planned to commission a building designed by Sir John Soane to be constructed on the site bounded by Westmoreland Street, Fleet Street, College Street and D'Olier Street (now occupied by the Westin Hotel). However the project was cancelled following the Act of Union 1800, when the newly defunct Parliament building was bought by Bank of Ireland in 1803.^{[citation needed]}

The bank's modern headquarters is now a modern building in Baggot Street, Dublin 2. As Frank McDonald notes in his book "Destruction of Dublin", when these headquarters were built, it caused the world price of copper to rise - such was the usage in the building. The main building is on the site of the former car assembly plant of Lincoln & Nolan, where Austin cars were assembled. Historically, the site was associated with the Battle of Rathmines in 1649, and it is said that the last skirmishes of that battle took place here. In addition to some Georgian houses, the site also included a pub (Laurence Ryans). The bank retained the pub licence for some years.

Built amidst a blazing row where Bank of Ireland was responsible for a weekend demolition of these Georgian houses, the bank as stands today is now regarded as an excellent example of the Miesien idiom, and among the purest contemporary corporate architectural forms built in Dublin. The bank head office was designed primarily by Ronnie Tallon, of Scott Tallon Walker Architects. Curiously, either by accident or by design, the Head Office (Block A) is aligned with the rising sun on the day of the Winter solstice (An Irish tradition dating from about 3000 B.C., best known at Newgrange). The phenomenon can best be seen in the corridors of the upper floors - the full length of corridors are brightly lit for a short period at sunrise on that day.

The old Bank of Ireland building continues today as a working branch of the bank. Today, visitors can still view the impressive Irish House of Lords chamber within the old headquarters building. The modern Irish Parliament is now housed in Leinster House in Dublin.

Recent history

• 1995
  • 19 December: Bank of Ireland merge First New Hampshire Bank with Royal Bank of Scotland's Citizens Financial Group
• 1996
  • 16 April: Bank of Ireland buys the Bristol and West building society for €882m, which keeps its own brand.
• 1999
  • 22 May: It is announced Alliance & Leicester is in merger talks with the Bank of Ireland.
  • 17 June: It is announced that merger talks with Alliance & Leicester have been called off.
• 2000
  • 31 July: It is announced that Bank of Ireland is to acquire Chase de Vere.
• 2002
  • 17 May: Bank of Ireland acquires Iridian, the US investment manager, which doubles the size of its asset management business.
• 2005
  • 21 September: Bank of Ireland completes the sale of the Bristol and West branch and Direct Savings (Contact Centre) to Britannia Building Society. This is the first re-mutualisation of a former Mutual company. Britannia promises that there will be no compulsory redundancies.
• 2008
  • 22 September: Moody's Investors Service has changed its outlook on Bank of Ireland from stable to negative. Moody's pinpointed concerns over weakening asset quality and the impact of a more challenging economic environment on profitability at Bank of Ireland.
  • 2008 share price collapse, see below
• 2009
  • 12 February: The Irish government announces a €7 billion rescue package for the bank and Allied Irish Bank plc.^[1]
  • 2009 ...The biggest bank robbery in the history of the state took place at Bank of Ireland at College Green.

Banking services

Republic of Ireland

The Group provides a broad range of financial services in Ireland to the personal, commercial, industrial and agricultural sectors. These include checking and deposit services, overdrafts, term loans, mortgages, international asset financing, leasing, instalment credit, debt financing, foreign exchange facilities, interest and exchange rate hedging instruments, executor, trustee, stockbroking, life assurance and investment fund management, fund administration and custodial services and financial advisory services, including mergers and acquisitions and underwriting. With the acquisition of New Ireland Assurance in December 1997 the Group has access to additional distribution channels and products for its life assurance and pensions business. The group provides services in multiple currencies, but primarily in the Euro.

The Bank operates telephone and online banking services for its customers under the name 365 phone and 365 online respectively. The telephone banking service was launched in 1996 and was formerly known as Banking 365. The online banking service followed in 1997 and was initially known as Banking 365 online. It also offers the Laser payment system.

The Group markets and sells its products on a domestic basis through the most extensive nationwide distribution network in Ireland and its direct telephone banking service. The Group has built a market share among credit institutions in Ireland of over 20% of resources and loans outstanding.

International Operations

The bank is headquartered in Dublin, and has operations throughout the Republic of Ireland. It also operates in the United Kingdom, particularly Northern Ireland, where it prints its own banknotes in Pounds Sterling (see section on banknotes below). In Great Britain, the bank expanded largely through the takeover of the Bristol and West Building Society in 1996. On 21 September 2005 the Bristol and West retail and contact centre network was sold to Britannia Building Society. Bank of Ireland has still retained the right to use the Bristol & West name to sell Mortgages. Bank of Ireland also provides financial services for the British Post Office throughout the UK.

Operations in the rest of the world are primarily undertaken by Bank of Ireland Asset Management who provide fund management services to institutions and pension funds in Germany, Australia, Canada, Japan and the United States and by Bank of Ireland Corporate Banking who provide services in France, Germany, Norway, Australia and the United States.

Banknotes

A £5 Sterling note issued by Bank of Ireland in Northern Ireland

Main article: Banknotes of the Bank of Ireland (Northern Ireland)

See also: Banknotes of Northern Ireland and Banknotes of the pound sterling

Although the Bank of Ireland is not a central bank, it does have Sterling note-issuing rights in the United Kingdom. While Bank of Ireland is headquartered in Dublin, in Ireland, it has operations in Northern Ireland, where it retains the legal right (dating from before the partition of Ireland) to print its own banknotes. These are pound sterling notes and equal in value to Bank of England notes, and should not be confused with banknotes of the former Irish pound.

Until April 2008, all Bank of Ireland notes featured the Queen's University of Belfast on the reverse side. A new series of £5, £10 and £20 notes issued in May 2008, all featuring an illustration of the Old Bushmills Distillery, and these notes will gradually replace the previous series.^[2][3]

The principal difference between the denominations is their colour and size:

• 5 pound note, blue
• 10 pound note, pink
• 20 pound note, green
• 50 pound note, blue-green

The Bank of Ireland does not issue banknotes in the Republic of Ireland. Section 60 of the Currency Act 1927 removed the right of Irish banks to issue banknotes, however "consolidated banknotes", of a common design issued by all "Shareholder Banks" under the Act, were issued between 1929 and 1953. Theses notes were not legal tender.

Controversies

Michael Soden

Michael Soden abruptly quit as group chief executive on 29 May 2004 when it was discovered that adult material that contravened company policy was found on his Bank PC.^[4] Soden issued a personal statement explaining that the high standards of integrity and behaviour in an environment of accountability, transparency and openness, which he espoused, would cause embarrassment to the Bank.^[5]

DIRT Controversy

An IR£30.5 million tax arrears liability was settled by Bank of Ireland in July 2000. The Bank told the Oireachtas Public Accounts Committee Inquiry that its liability was in the region of £1.5 million. The settlement figure was 'dictated' by the Revenue Commissioners following an audit by the Commissioners^[6]. It was in Bank of Ireland that some of the most celebrated of the "celebrated cases" of non-compliance and bogus non-resident accounts have to date been discovered and disclosed. Thurles, Boyle, Roscrea (1990), Miltown Malbay (1991), Dundalk (1989/90), Killester (1992), Tullamore (1993), Mullingar (1996), Castlecomer, Clonmel, Ballybricken, Ballinasloe, Skibbereen (1988), Dungarvan and, disclosed to the Oireachtas Public Accounts Sub-Committee, Ballaghaderren (1998) and Ballygar (1999).

The Public Accounts Sub-Committee Inquiry concluded that "the most senior executives in the Bank of Ireland did seek to set an ethical tone for the bank and unsuccessfully sought Revenue Commissioners assistance to promote an industry-wide Code of Practice^[7].

Stolen laptops

In April 2008 it was announced that four laptops with data pertaining to 10,000 customers^[8] were stolen between June and October 2007. This customer information included names, addresses, bank details, medical and pension details^[9].

The thefts were initially reported to the Garda Síochána, however the Banks senior management did not know about the problem until February 2008 after an internal audit uncovered the theft and the Bank did not advise the Data Protection Commissioner and the Financial Regulator until mid-April 2008. It also came to light that none of the laptops used encryption to protect the sensitive data.

The Bank has since released a press release detailing the seven branches affected and its initial response,^[10] later in the month the Bank confirmed that 31,500 customer records were affected as well as an increased number of branches.^[11]

Record bank robbery

Main article: Bank of Ireland robbery

On 27 February 2009 it was reported that a criminal gang from Dublin had robbed €7 million from the Bank of Ireland's main branch in College Green. The robbery was the biggest in the history of the Republic of Ireland, during which a girlfriend of an employee, her mother and her mother's five-year-old granddaughter were held hostage at gunpoint. Gardaí arrested six men the next day, and recovered 1.8 million euro.

A spokesperson for the bank said: "Bank of Ireland's priority is for the safety and well-being of the staff member and the family involved in this incident and all of the bank's support services have been made available to them." ^[12]

Sports sponsorship

Bank of Ireland is a major sponsor of rugby union in Ireland, being the shirt sponsor of three of the four Irish provincial teams (Connacht Rugby, Leinster Rugby and Ulster Rugby) . Golfer Padraig Harrington and the Irish Cricket team also enjoys sponsorship from the bank.

2008 share price collapse

The neutrality of this section is disputed. Please see the discussion on the talk page. Please do not remove this message until the dispute is resolved. (March 2009)

On 21 Feb 2007, Bank of Ireland shares reached €18.83 during the day, and closed at €18.65. With almost exactly 1bn shares in issue, this valued the company at €18.8bn

On 5 March 2009, the shares reached €0.12 during the day, thereby reducing the value of the company by over 99% from its 2007 high. At the 2009 AGM, shareholders criticised the performance of Auditors, PriceWaterHouseCoopers.^[13]

Quality of Audits Questioned

The annual profitability as at Feb 2007, was subsequently published as €1.95bn The profit for the half-year ended 30 Sept 2008 (unaudited) was published on 13 Nov 2008 as €0.706bn, and the outlook presented by the Governor was that the second-half of the financial year to March 2009 would be "marginally better than break-even." Thus the expected annual profit for 2008/9 is around €0.7bn.

Although there has been a substantial drop in profits, the drop in the share price is much greater than would be appropriate, based upon the published results and the interim statement of 13 Nov 2008 There is a very substantial gap between the confident but cautious tone of the announcements of 13 Nov ^[14] and the newspaper reports of the following day, typical of which is that of the Irish Independent "Analysts not convinced of Goggin Case". Clearly, both the media and the brokers and analysts have little confidence in the management of the company.^{[neutrality disputed]} The second and more serious problem, (which, it must be said, remains unacknowledged by bank management, the financial regulator and the Irish government) is solvency. The question concerning solvency has arisen due to domestic problems in the crashing Irish property market. Bank of Ireland, like most Irish financial institutions, has exposure to property developers in their loan portfolio. These property developers are currently suffering from gross over-supply of property, much still unsold, while demand has evaporated. The massive immigration from Eastern Europe which had propped up demand has now reversed due to rapidly rising unemployment in Ireland. Irish property developers own speculated billions of Euros of overvalued land parcels such as urban brownfield and greenfield sites, and also agricultural land at an average value of €23,600 per acre ($32,000 per acre or €60,000 per hectare)^[15] which is several multiples above the value of equivalent land in other European countries.

Irish banks correctly identify a systematic risk of triggering an even more severe financial crisis in Ireland if they were to call in the loans as they fall due. The loans are subject to terms and conditions, referred to as "covenants". These covenants are being waived^[16] in fear of provoking the (inevitable) bankruptcy of many property developers and Irish banks are thought to be "lending some developers further cash to pay their interest bills, which means that they are not classified as 'bad debts' by the banks"^[17]. Furthermore, Bank of Ireland's impairment provisions are not being increased correspondingly on their balance sheet. Their accounts for the last financial year states a bad debt provision of only €46 million which is a reduction of 8% from the previous year^[18]. This does not appear to be consistent with the real negative changes taking place in property market fundamentals. It should be said, however, that this is in line with most financial institutions' projected figures; doubtless a more realistic estimate will be made when next their accounts are published. In late 2006 the Chief Economist of Bank of Ireland Dr Dan McLoughlin claimed that house prices would increase another 12% by the end of 2006 to reach an average national house price of €395,000 (over half a million dollars on average)^[19]. In retrospect, the claim, made at the height of the Irish property bubble, was completely inaccurate, doubtless in hindsight many banks are regretting their lending decisions made during this time.

The Central Bank told the Oireachtas Enterprise Committee that shareholders who lost their money in the banking collapse are to blame for their fate and got what was coming to them for not keeping bank chiefs in check, but did admit that the Central Bank had failed to give sufficient warning about reckless lending to property developers.^[20]

An interesting footnote to this story is that, on 7th of October 2008 Danske Bank wrote off a substantial sum which included property-related losses incurred by its Irish subsidiary - National Irish Bank^[21]. Write downs by the domestically-owned Irish banks are only now beginning to take place^[17]. Rumours circulated that Spain's Grupo Santander had expressed an interest in acquiring Bank of Ireland but the acquisition was not undertaken when due diligence had been undertaken. This was subsequently denied by Bank of Ireland^[22].

References

1. ^ Irish Times on rescue package Feb 2009
2. ^ "Bank of Ireland to feature Old Bushmills Distillery on new Northern Ireland note issue". Bank of Ireland. 2008-02-11. http://www.bankofireland.com/press_room/latest_releases/2008/General_Content_1000233.html. Retrieved 2008-10-30. 
3. ^ "Bank raises glass to famous drink". BBC News. 2008-04-23. http://news.bbc.co.uk/1/hi/northern_ireland/7361944.stm. Retrieved 2008-10-30. 
4. ^ "Bank of Ireland chief quits over PC porn". The Register. 2004-06-01. http://www.theregister.co.uk/2004/06/01/bank_porn/. Retrieved 2006-08-15. 
5. ^ "Personal statement by Michael D. Soden Group Chief Executive Bank of Ireland" (PDF). Michael D. Soden. 2004-05-29. http://www.bankofireland.ie/html/gws/statement.pdf. 
6. ^ "Revenue set to claw back bonanza in unpaid taxes". The Irish Times. 2000-07-06. http://www.irishtimes.com/newspaper/finance/2000/0706/pfarchive.00070600128.html. 
7. ^ "Public Accounts Committee Parliamentary Inquiry into DIRT". 1999-09-27. http://www.irlgov.ie/committees-99/c-publicaccounts/sub-rep/page9.htm. 
8. ^ Data theft involving 10,000 bank records RTÉ News, 21 April 2008
9. ^ BoI kept quiet about stolen client details since February Irish Independent, 23 April 2008
10. ^ Bank of Ireland Life - Customer Update on Stolen Laptops Bank of Ireland Press Room, 22 April 2008
11. ^ Bank of Ireland Life - Update on Stolen Laptops Bank of Ireland Press Room, 28 April 2008
12. ^ BKidnap gang steals €7 million from Bank of Ireland Times Online, 27 February 2009
13. ^ http://www.independent.ie/national-news/anger-smoulders-but-the-fury-has-gone-1805702.html
14. ^ "Bank of Ireland Investor Relations 2008/9" (html). Bank of Ireland. 13 Nov 2008. http://www.bankofireland.com/investor/financial_information/2009/index.html. Retrieved 2008-12-03. 
15. ^ "Irish Agricultural Land Research" (pdf). Savills Hamilton Osbourne King. May 2008. http://www.savills.ie/pdfs/articles/166.pdf. Retrieved 2008-10-08. 
16. ^ Oliver, Emmet (2008-08-31). "New waive of Irish banking". Sunday Tribune. http://www.tribune.ie/business/news/article/2008/aug/31/new-waive-of-irish-banking/. Retrieved 2008-10-01. 
17. ^ ^{a b} Collins, Liam (2008-10-12). "Top developers see asset values dive two-thirds". Irish Independent. http://www.independent.ie/national-news/top-developers-see-asset-values-dive-twothirds-1496605.html. 
18. ^ "Reports and Accounts for the year ended 31 March 2008". Bank of Ireland. 2008-06-10. pp. 73. http://online.hemscottir.com/ir/bir/ar_2008/ar.jsp?page=73&zoom=1.0&layout=single. Retrieved 2008-10-11. 
19. ^ Charlie Weston (2006-08-01). "Average house price to hit €400,000 by end of the year". Irish Independent. http://www.independent.ie/national-news/average-house-price-to-hit-400000-by-end-of-the-year-81103.html. Retrieved 2008-10-11. 
20. ^ http://www.herald.ie/national-news/top-official-says-shareholders-to-blame-for-the-banking-crisis-1846180.html
21. ^ "Another traumatic day for investors in Irish banks". Irish Times. 2008-10-07. http://www.irishtimes.com/newspaper/finance/2008/1008/1223335465924.html. Retrieved 2008-10-07. 
22. ^ "Bank of Ireland Statement". Bank of Ireland. 2008-09-19. http://www.bankofireland.com/press_room/latest_releases/2008/General_Content_1000328.html. Retrieved 2008-10-11. 

External links

• Official Republic of Ireland Site
• Official Northern Ireland Site
• Official Great Britain Site
• The Bank of Ireland's position on IBAN calculators

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