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Bank of Scotland (Ireland)

Feb, 2010

It says much for the news values of the Irish media that a retail bank closure entailing 750 job losses and affecting tens of thousands of people across the country gains less exposure than the resignation of a backbench TD.

Still, there is a lot of coverage of the dramatic exit of Bank of Scotland (Ireland) in the business pages, where most commentators are happy to dance on the grave of their one-time hero.

Once hailed as the kind of challenger to the Irish banking duopoly the market was crying out for, in hindsight it is being blamed for fuelling the property bubble that has brought the economy to its knees.

“We put too much capital and too much competition against a small market the size of Manchester,” David Went, then chief executive of Irish Life & Permanent recently told The Sunday Times. “With hindsight, it was like putting a flame-thrower to a can of petrol.”

Shane Ross in The Sunday Independent also comes to bury the bank rather than praise it.

“Remember the arrival of Bank of Scotland in 1999,” the senator asks. “At the time most of us naively welcomed the invaders as saviours of the consumer. Here in the Sunday Independent we even awarded them ‘The Business of the Year’. Ouch. What fools we were. We were hoodwinked.”

However, aside from the obvious bad news for those being made redundant, the commentators are almost unanimous the departure will mean it’s back to the future for Irish consumers where banking choice is concerned.

“No one knows what is next but I would be surprised if this is the last smaller player to disappear from the scene,” Brian Lucey, associate professor of finance at Trinity College told The Sunday Business Post’s personal finance correspondent, Emma Kennedy.

“Reduced competition will take us back to the days of an oligopolistic market with higher charges and lower interest rates,” Lucey opined.

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