UK arm of Irish bank in discussions with several companies interested in financial services partnerships as profits treble
The British arm of Bank of Ireland is in talks with several high-street names about partnerships that could see more retailers challenge banks by offering customers savings and loans.
Bank of Ireland UK , which currently sells mortgages, savings and foreign currency through the Post Office fascia, grew profits from £61m to £199m last year, as it doubled new mortgage lending.
However, chief executive Des Crowley said the bank was planning further expansion in the UK, entering discussions with several high-street businesses about setting up joint ventures. He added that the bank could bring back the Bristol & West brand, six years after closing the building society.
Marks & Spencer and Tesco operate banking services, and other retailers are believed to be considering entering financial services as bank branches disappear from the high street.
“We have aspirations for another distribution brand, and we’re in lots of discussions,” Mr Crowley said, adding that he hoped to have an agreement in the next two years.
“Our organisation is gearing up in terms of capital liquidity and resources to be able to handle more and deeper distribution channels.”
Bank of Ireland UK, a ring-fenced, separately capitalised subsidiary of the Irish bank, has around 3m customers in Britain, largely via Post Office Money. It operates the Post Office’s foreign exchange and cashpoints as a 50-50 joint venture, and pays the state-owned organisation a commission to sell mortgages, savings, insurance and loans under the brand.
Mr Crowley boasts that with 11,500 Post Office branches, Bank of Ireland UK has Britain’s biggest banking network. With the UK’s biggest banks shutting branches, particularly in rural areas, Mr Crowley said his bank had a major opportunity to attract people who want a physical location to bank.
The bank, which has been in the UK for 40 years, and bought the Bristol & West building society in 1997 before closing it when the financial crisis hit, lent £1.8bn-worth of mortgages last year, up from £900m in 2013, and has plans to grow lending at a similar rate this year.
Mr Crowley said the bank had reached new agreements with mortgage brokers, and would consider selling mortgages again under the Bristol & West name. “Bristol & West had about 3pc of the market through 2006 to 2008. Last year we had about 1.2pc, so we want to get back to where we were,” he said.
Through the Post Office, Bank of Ireland UK is trialling a current account in 239 branches, but Mr Crowley said launching a fully-fledged account was not imminent, saying the bank would wait for a competition investigation into the market to conclude.
He said there would be options to re-enter UK business lending, after the bank was forced to stop loans in 2013 as a condition of its parent’s bail-out.
This article was written by James Titcomb from The Daily Telegraph and was legally licensed through the NewsCred publisher network.