Seismic is really the only way to sum up the year just gone in the Irish banking and financial services sector.
We went into 2021 with five main retail banks, who between them had a sizeable branch footprint all over the country.
And we will exit it with two of those banks on their way out the door and dozens fewer branches.
In fact, so much happened in 2021 in the industry, it's difficult to know where to begin.
So let’s start at the start, or even before then.
It was September of 2020 when an Irish Times scoop suggested Ulster Bank’s parent NatWest was conducting a strategic review of its operations in the Republic of Ireland which could ultimately lead to its wind down.
But it took top brass in London until February 19 to conclude the review, which indeed confirmed that after many years of struggling to make a decent return on its capital, Ulster Bank was to close here in an "orderly and considered manner".
Despite having long been rumoured, the decision nonetheless came as a shock to the bank’s 1.1 million customers and 2,800 staff.
It also rattled the finance community, the Government and wider political class.
What, after all, does it say about Ireland’s banking market if large established and embedded lenders are willing to up sticks and take their capital elsewhere?
Part of the announcement included news that a memorandum of understanding had been signed with AIB that if concluded would see the rival buy €4.2 billion in commercial loans from Ulster Bank.
Those negotiations continued apace and by the end of June the talks were over the line, with AIB agreeing to buy the book for €4.1 billion and take 280 Ulster Bank staff with it.
Talks between Ulster Bank and Permanent TSB on other assets took a little longer.
It was the end of July before they had signed a non-binding memorandum of understanding that envisaged PTSB buying the performing non-tracker mortgage book, performing SME loan business, the Lombard Asset Finance unit and 25 branch locations in Ulster Bank's network.
Then earlier this month, the €7.6 billion deal became binding.
When the deal closes, probably next year, PTSB will pay €6.4 billion in cash funded from internal sources and NatWest will take a 16.7% stake in the enlarged new Permanent TSB, watering down the state's current 75% stake in the process.
450 staff are set to transfer to PTSB as part of the arrangement, which is expected to complete in late 2022 or early 2023.
But Ulster Bank wasn’t the only lender here eyeing the door.
KBC eyes the door
The announcement by KBC in April that it too was looking at a way out came as a much bigger surprise.
The Belgian lender didn’t provide a clear reason at the time, but just said it had opened talks with Bank of Ireland about a possible sale of its performing loan assets and liabilities and that it would look elsewhere for a buyer for its non-performing loans.
It was yet another shock, coming from a bank that had a history with the Irish market dating back to 1978, 1,246 employees, 12 hubs and about 320,000 customers.
As with Ulster Bank, the talks didn’t hang around, and by August KBC had announced plans to sell its €1.1 billlion non-performing loan portfolio to funds managed by private equity firm, CarVal Investors, with the loans to be managed by Pepper Finance.
The negotiations with Bank of Ireland took a little longer, but in October the two parties concluded a deal worth €5 billion that will see BoI purchase substantially all of KBC’s €8.9 billion in performing loans and its €4.4 billion deposit book, sealing the fate of KBC Bank Ireland.
The two exits, when completed next year or perhaps in 2023, will dramatically alter the landscape of Irish banking, reducing choice and competition, but equally providing additional scale to AIB and Bank of Ireland that may enable them to reduce costs and become stronger lenders.
For PTSB though, the Ulster Bank departure and the deal that should follow, will be potentially transformative, morphing it into the third largest retail bank in the country and providing the foundations for what potentially could be a long sought third banking force.
It is a huge gamble though for CEO Eamonn Crowley, the board and the Government, which continues to own 75% of the bank.
If the announcement of the planned departure of two of the five largest banks here weren’t enough, there was plenty going on inside those that are staying too.
While PTSB was looking at expanding its branch network through acquisition, Bank of Ireland was heavily criticised by community and business groups as well as politicians when in early March it revealed it planned to close 103 branches in the Republic of Ireland and Northern Ireland.
The bank said a tipping point had been reached in the use of digital banking, propelled by the pandemic and as a result footfall in certain branches had fallen below sustainable levels.
However, a deal was put in place with An Post to give Bank of Ireland customers banking services at more than 900 locations across Ireland.
Likewise, AIB trimmed its physical footprint too, revealing plans in July to close 15 branches in urban and suburban areas and merge their operations with others nearby.
Most of the branches impacted were in Dublin and Cork and like Bank of Ireland, AIB said it would rely more heavily on An Post to deliver some of its counter-based services in future.
A tale of two stockbrokers
As well as restructuring, both banks were in acquisitive form too, eyeing up opportunities to broaden their revenue streams away from purely interest-based income.
And so, when the second of two attempts to sell Goodbody Stockbrokers to separate Chinese buyers fell through in July of 2020, AIB swooped in and began talks with its owners, Fexco and Goodbody senior management.
This culminated with the announcement of a deal in March that saw the bank purchase Ireland’s oldest stockbroker for €138m, which was subsequently completed in September.
Davy had been touted as a potential buyer for Goodbody, after the second Chinese deal fell through.
But in what would prove a bizarre twist, on the day AIB first inked the deal for Goodbody, an announcement came that would ultimately precipitate the sale of Davy itself.
On March 2, the Central Bank of Ireland fined Davy €4.1m for a series of regulatory breaches.
The penalty was imposed because Ireland’s largest stockbroker had acted for a property developer client in a bond deal, without telling him that the buyer was a consortium of Davy employees.
The controversy quickly grew legs and within days three senior executives, CEO Brian McKiernan, deputy chairman, Kyran McLaughlin, and Head of Bonds, Barry Nangle had left the organisation.
The broker then lost its status as a primary dealer of Irish Government bonds, leading to the shuttering of its bond desk and the laying off of staff.
The scandal left Davy reeling and although those involved in the consortium had by this stage all left the organisation, many of them continued to own a large portion of the firm, a situation viewed externally as untenable.
And so, a little over a week after the Central Bank fine was revealed, Davy was put on the market.
There was plenty of interest, despite the obvious and stinging hit the broker’s reputation had taken.
But ultimately, it was Bank of Ireland that was to win out, securing the company’s wealth management and capital markets divisions for €440m as well as up to a further €125m for cash that was to be realised from the sale of two other parts of the firm.
The development, cleared by the competition regulators in early December, marked an extraordinary turn of events for Ireland’s best-known stockbroker.
An unintended consequence of the sale of both Davy and Goodbody was that the Government was forced to soften its stance on the ban on bonuses at the banks, with current pay structures in both firms set to remain in place, despite the change of ownership.
Davy wasn’t the only financial services firm to feel the heat from regulators though.
In March Ulster Bank was fined a record €38m for its role in the tracker mortgage controversy.
During its enforcement investigation, the Central Bank uncovered what it described as "serious failings" by the bank in its treatment of 5,940 customers over a 16-year period from 2004 until last year.
The transgressions included extended periods of overcharging, resulting in the loss of 43 customers' properties, including 29 family homes.
Bank of Ireland also received a substantial rap on the knuckles from the Central Bank in December, fined €24.5m for regulatory breaches connected to its IT systems and related internal controls.
All the main banks continued to reduce their exposures to bad loans by selling off portfolios of them through the course of the year.
AIB also revealed a plan to sell its UK small business loan book to Alantra for €713m.
Reducing the State's stake
With both AIB and Bank of Ireland beginning to catch the eye of investors again, the Minister for Finance decided it was a good time to begin selling down some of the State's stakes in both lenders.
It was Bank of Ireland where that process started first, with the announcement in June that the Government was to begin selling off part of its 13.9% shareholding in Bank of Ireland over six months.
The sale was to occur through a pre-arranged trading plan and carried out in "a measured and orderly" way.
Shares were not to be sold below a certain price which the Department of Finance was to keep under review and the number of shares sold would depend on market conditions.
The process kicked off soon afterwards and at this point the State's stake has fallen below 8%.
The apparent success of the strategy prompted a similar decision regarding the State's 71% holding in AIB.
On December 21, the Minister for Finance announced a similar process was to begin with that, taking place over the next six months.
Minister for Finance Paschal Donohoe said the Government's continuation of pandemic supports for the economy was one factor behind its decision.
And while the traditional banks downsized and resized, non-bank lenders continued their relentless march into the Irish market.
Revolut grew its Irish user base to 1.5 million driven in part by the pandemic, and N26 continued to add more customers here.
Dutch digital bank Bunq bought Irish SME challenger lender Capitalflow and looks set to enter the fray having sought permission to passport its services into the market here.
Competition also intensified in the mortgage market, as lenders such as Avant Money and Finance Ireland introduced new very long-term fixed rate offerings.
With such dramatic tumult sweeping the industry, it is perhaps not surprising that calls emerged, led by the Financial Services Union, for a Government backed review of the future of the sector.
In November the Minister for Finance published terms of reference for the exercise, which will examine where banking and financial services is today and where it might go in the years ahead.
Though given the extraordinary events of the past 12 months, it would be a brave person who would try to predict that.
Read more: 2021 in Review