| Type | Public company |
|---|---|
| Industry | Finance |
| Founded | 1783 |
| Headquarters | 40 Mespil Road Dublin 2, Ireland |
| Key people | Pat Molloy, Governor, Richie Boucher, CEO |
| 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 traditional 'Big Four' Irish banks.
Historically the premier banking organisation in Ireland, 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.
In March 2011 during the Irish banking crisis the bank was found to be in need of an external €5.2 billion bailout.[1]
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Bank of Ireland is the oldest bank in continuous operation (apart from 4 closures due to bank strikes, 1950, 1966, 1971, 1976) in Ireland.
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.
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 This function was fulfilled by the Currency Commission, which was later superseded by the Central Bank of Ireland in 1942.
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. [2]
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.[3] The old Bank of Ireland building continues today as a working branch. 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. In 2011, the Irish Government set out proposals to acquire the building as a venue for the state to use as a cultural venue.[4]
In the 1970s the bank moved its headquarters to a modern building on Lower 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 Miesian architecture, and among the purest contemporary corporate architectural forms built in Dublin.
In 2010 the bank moved to a new, smaller headquarters on Mespil Road.[5]
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, installment credit, debt financing, foreign exchange facilities, interest and exchange rate hedging instruments, executor and trustee services.
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.
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. 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 Corporate Banking who provide services in France, Germany, Australia and the United States.
Although the Bank of Ireland is not a central bank, it does have Sterling note-issuing rights in the United Kingdom. While the Bank is headquartered in Dublin, 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 April 2008 (New-look notes will begin to be circulated in April), all featuring an illustration of the Old Bushmills Distilleryon the reverse side, and these notes will gradually replace the previous series.[12][13]
The principal difference between the denominations is their colour and size:
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. These notes were not legal tender.
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.[14] 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.[15]
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.[16] 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.[17]
In April 2008 it was announced that four laptops with data pertaining to 10,000 customers[18] were stolen between June and October 2007. This customer information included names, addresses, bank details, medical and pension details.[19]
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 Central Bank of Ireland 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,[20] later in the month the Bank confirmed that 31,500 customer records were affected as well as an increased number of branches.[21]
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." [22]
The information provided to the Department of Finance in 2009 in advance of a recapitalisation of the bank which cost the taxpayer €3.5 billion, “was incomplete and misleading”. It also gave wrong information to the Minister for Finance who in turn misled the Dail on €66 million in bonuses it paid since receiving a State guarantee. External examiners found it used “a restrictive and uncommon interpretation of what constituted a performance bonus” .[23] Their report also found that there had been "a catalogue of errors" and that the information supplied by Bank of Ireland to the Department of Finance was "presented in a manner which minimised the level of additional payments made.[24] The Bank paid €2 million by way of compensation to the Exchequer for providing "misleading" information.[25][26][27]
The Bank has forged strong links with Indian IT outsourcing firm HCL Technologies. HCL was short-listed for a €450m IT infrastructure outsourcing contract in 2009 - the deal was ultimately awarded to IBM. [28] Since then, BOI has given HCL a €30m Business Process Outsourcing contract and has selected them as strategic local resourcing partner in Ireland. In addition to that, HCL have opened a software factory for Bank of Ireland in India and has started to outsource production support for the retail banking and payments applications in BOI. [29] This exclusive relationship with HCL has been seen as controversial in the context of the substantial Irish taxpayer investment in Bank of Ireland - and the lack of any significant investment by HCL in Ireland. A banking analyst said in July 2011 that BOI's IT system is "very antiquated."[30]
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) . The Irish Cricket team also enjoys sponsorship from the bank.
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.[31]
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.
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.[32]
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