National Australia Bank has sold its National Irish Bank and Northern Bank to Denmark's biggest bank Danske Bank for almost €1.4 billion.
The IBOA says it has been given a clear commitment from the new owners that there will be no job losses or branch closures after today's announced sale.
IBOA general secretary Larry Broderick says that although Danske Bank is looking at cutting costs at the two banks by 15%, he has been assured that jobs will not be cut.
Danske Bank said it expected a positive effect on its earnings per share from 2006, once the transactions are approved by authorities by the end of the first quarter of 2005.
The Danish bank said that at the current level of activity, costs at the two banks can be reduced by about 15%. These cost cutting moves are expected to take place during 2006 and 2007, while the bank said the migration to its technological platform is expected to be completed in the first half of 2006.
The two banks will be integrated in the new organisational structure of the Danske Bank Group. It said this means that administrative functions, finance, product development, communications, HP development and development and support structures will be integrated in the group's international retail banking platform.
NIB has 59 branches throughout Ireland with a workforce of over 800 employees. It has 167,000 retail and business customers and lending totals €2.9 billion.
Northern Bank is the largest retail bank in the North with 95 branches and about 2,300 employees. It has 415,000 retail and business customers and lending totals £3.2 billion.
Danske Bank said that among the reasons for buying the two banks was that their profiles and structures match that of the Danish bank. It also said that the two economies are healthy and offer a good solid basis for growth.
In a statement, Danske Bank said the acquisition would present it with an opportunity to reap the benefits of the fast-growing Irish economy.
National Australia Bank described the sale as an excellent outcome for it. 'We have achieved an attractive price for these banks, generating a significant profit and strengthening our capital base,' commented NAB's chief executive John Stewart. He said the sale will now allow NAB to focus all its attention on its UK operations.
Danske Bank said that both NIB and Northern Bank will continue to operate under local management.
Don Price, CEO of the two banks, is expected to become a member of the Danske Bank Group's Executive Committee, while Peter Straarup, CEO of the Danske Group, is expected to take the position of chairman of the two Irish boards.
The two banks will continue to operate under their own brand names, the Danish bank added.
Danske Bank has assets of $342 billion and a market capitalisation of $29.9 billion.
The IBOA earlier described today's announcement of the sale of National Irish and Northern Banks as a positive development that will bring a sense of welcome relief to staff.
IBOA general secretary Larry Broderick says the union will be discussing the sale process with senior management from National Australia Bank and Danske Bank in the coming days.
'There will be a lengthy transition period and IBOA will be working with both banks to ensure this runs as smoothly as possible. IBOA's priority wil be to ensure staff jobs, terms and conditions are protected,' a statement from the union said.
