The Bank of Ireland
( ) ( . , ) is a commercial
operation in Ireland, which is one of the
' in both parts of the
Historically the premier banking organisation in Ireland, today
Bank of Ireland is number two to Allied Irish Banks
. 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
of Ireland should not be confused with the Central Bank of
Ireland, as it is a commercial bank and not the Irish
central bank, as its name might suggest.
Bank of Ireland is the oldest bank in continuous operation (apart
from 4 closures due to bank strikes, 1950, 1966, 1971, 1976) in
Chronology of history to 1990
- 1719 ...Abortive attempt to establish a bank to be called "Bank
of Ireland". Another abortive attempt 2 years later
- 1782 ...The bank was formed by an Act of the Irish Parliament in 1782 to support
public and commercial finances in Ireland.
- 1783 ...25 June 1783, the Bank of Ireland opened for business
at Mary's Abbey (Off Capel St., Dublin) - now on the route of the
Luas Tram (Red Line) - in a private house
previously owned by one Charles Blakeney. 12700 banknotes were
issued with a total value of £882,500
- 1785 ...First forgeries of Bank of Ireland notes identified.
Forgery became extensive in subsequent
- 1787 ...March 2 1787, the bank suspended cash payouts during a
- 1808 ...June 6 1808, Bank of Ireland moved to 2 College Green.
This building had been the parliament building until the Act of Union 1800 abolished the Irish
Parliament. The Irish House of
Commons had been damaged in a fire, and considerable
modifications were made to this area before opening as a bank. (The
Irish House of Lords was
preserved, and remains to the present day, despite the fact that a
statue of Queen Victoria was
- 1820 ...Bank of Ireland weathered one more of many banking
crises - but many other banks fail.
...Bank of Ireland opened its first branch - in Cork. Six other branches were opened later in
- 1835 ...Bank of Ireland introduced the overdraft - previously, all lending was by
discounting of bills.
- 1847 ...Major banking crisis following the Great Irish Famine
- 1857 ...Another banking crisis
- 1864 ...Bank of Ireland first pays interest on deposits
- 1886 ...Bank of Ireland first disclosed its accounts and
balance sheet. Gross Profit was £220,681-9-5d. Total assets were
£16,142,797-14-0d. There was another banking crisis, and a major
bank failure - Munster Bank Ltd. Munster & Leinster Bank - now
included in AIB was formed from the
- 1914 ...190 staff members joined the army and saw service. 32
did not return.
- 1919 ...Irish banks recognise the Irish Bank Officials
Association (IBOA), a banking union formed 2 years earlier
- 1926 ...The Bank of Ireland Crest, originally applied for in
1783, was eventually granted. The Bank of Ireland took control of
the National Land Bank - a friendly society. Following restructure
as a limited company, it was rebranded as National City Bank
- 1929 & 1935 Legislation to reform the corporate structure
of Bank of Ireland - Limited liability introduced
- 1948 ..."The Bank of Ireland 1783-1946" by F.G. Hall was
published jointly by Hodges Figgis
(Dublin) and Blackwell's (Oxford)
- 1950 ...Irish banks closed for 7 weeks due to a strike by
members of the Irish Bank Officials Association. Other total
closures in 1966, 1971, and 1976
- 1956 ...The Bank was authorised to operate the Prize Bond scheme, on behalf of the government,
and continued to do so until 1989.
- 1958 ...The Bank took over the Hibernian Bank Limited
- 1965 ...The National Bank Ltd, a bank founded by Daniel O'Connell in 1835 had branches in
Ireland and Britain. The Irish branches were acquired by Bank of
Ireland and rebranded temporarily as National Bank of Ireland,
before being fully incorporated into Bank of Ireland. The British
branches were acquired by Williams & Glyn's Bank.
- 1983 ...Bank of Ireland Bi-Centenary. A commemorative stamp was
issued. The Bank commissioned the publication of "An Irish
From the beginning, it was connected closely with the leading
banking family in Dublin, the Huguenot
Touche family. A member of that family - David La Touche
the first Governor.
Role as government banker
The Bank of Ireland is not, and was never, the Irish central bank.
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
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
in 1922 until 31 December 1971, the Bank of Ireland was
the banker of the Irish Government
but was not the central bank
function was fulfilled by the Currency Commission
, which was later
superseded by the Central Bank of Ireland in 1943.
On 20 March 2005, Bank of Ireland announced 2,000 job cuts in a
move to reduce its cost base, this coming despite profits in excess
of €1 billion for that financial year.
headquarters of the bank until the 1970s was the impressive
Bank of Ireland
building on College
Facade of the bank on Westmoreland
This building was originally
designed by Edward Lovett
in 1729 to host the Irish Parliament, and it was the
world's first purpose-built two-chamber parliament building.
The bank had planned to commission a building designed by Sir
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.
The bank's modern headquarters is now a modern building in 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.
building is on the site of the former car assembly plant of Lincoln
& Nolan, where Austin cars were
Historically, the site was associated with the
Battle of Rathmines
, 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 the Miesien
idiom, and among the purest contemporary corporate architectural
forms built in Dublin. The bank head office was designed primarily
by Ronnie Tallon, of Scott Tallon
Architects. Curiously, either by accident or by design,
the Head Office (Block A) is aligned with the rising sun on the day
of the Winter solstice (An Irish tradition dating from about 3000
B.C., best known at Newgrange).
The phenomenon can best be seen in the
corridors of the upper floors - the full length of corridors are
brightly lit for a short period at sunrise on that day.
The old Bank of Ireland building continues today as a working
branch of the bank. Today, visitors can still view the impressive
Irish House of Lords
within the old headquarters building. The modern Irish
Parliament is now housed in Leinster House in Dublin.
- 16 April: Bank of Ireland buys the Bristol and West building society for
€882m, which keeps its own brand.
- 22 May: It is announced Alliance & Leicester is in
merger talks with the Bank of Ireland.
- 17 June: It is announced that merger talks with Alliance &
Leicester have been called off.
- 31 July: It is announced that Bank of Ireland is to acquire
Chase de Vere.
- 17 May: Bank of Ireland acquires Iridian, the US investment manager, which doubles
the size of its asset management business.
- 21 September: Bank of Ireland completes the sale of the Bristol
and West branch and Direct Savings (Contact Centre) to Britannia Building Society. This
is the first re-mutualisation of a former Mutual company. Britannia
promises that there will be no compulsory redundancies.
- 22 September: Moody's Investors Service has changed its outlook
on Bank of Ireland from stable to negative. Moody's pinpointed
concerns over weakening asset quality and the impact of a more
challenging economic environment on profitability at Bank of
- 2008 share price collapse, see below
- 12 February: The Irish government announces a €7 billion rescue
package for the bank and Allied Irish Bank plc.
- 2009 ...The biggest bank
robbery in the history of the state took place at Bank of
Ireland at College Green.
Republic of Ireland
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,
instalment credit, debt financing, foreign exchange facilities,
interest and exchange rate hedging instruments, executor, trustee,
, life assurance
and investment fund
management, fund administration
and custodial services and financial advisory services, including
mergers and acquisitions and underwriting. With the acquisition of
New Ireland Assurance in December 1997 the Group has access to
additional distribution channels and products for its life
assurance and pensions business. The group provides services in
multiple currencies, but primarily in the Euro
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
. It also offers the Laser
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.
is headquartered in Dublin, and has
operations throughout the Republic of Ireland. It also operates in
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.
On 21 September 2005 the
Bristol and West retail and contact centre network was sold to
. Bank of Ireland has still retained the right to use
the Bristol & West name to sell Mortgages. 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 Asset Management who
provide fund management services to institutions and pension funds
in Germany, Australia, Canada, Japan and the
States and by Bank of Ireland Corporate Banking who
provide services in France, Germany, Norway, Australia and the United States.
A £5 Sterling note issued by Bank of
Ireland in Northern Ireland
Although the Bank of Ireland is not a central bank, it does have
Sterling note-issuing rights in the United Kingdom. While Bank of Ireland
is headquartered in Dublin, in Ireland, 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
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 May 2008, all featuring an illustration
of the Old
Bushmills Distillery, and these notes will gradually replace the
The principal difference between the denominations is their colour
of Ireland does not issue banknotes in the Republic of
- 5 pound note, blue
- 10 pound note, pink
- 20 pound note, green
- 50 pound note, blue-green
Section 60 of the Currency Act 1927
removed the right of Irish banks to
issue banknotes, however "consolidated
", of a common design issued by all "Shareholder
Banks" under the Act, were issued between 1929 and 1953. Theses
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. 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.
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
audit by the Commissioners. 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.
In April 2008 it was announced that four laptops with data
pertaining to 10,000 customers were stolen between June and October
2007. This customer information included names, addresses, bank
details, medical and pension details.
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
and the Financial Regulator
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, later in the month the
Bank confirmed that 31,500 customer records were affected as well
as an increased number of branches.
Record bank robbery
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
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."
Bank of Ireland is a major sponsor of rugby
in Ireland, being the shirt sponsor of three of the four
Irish provincial teams (Connacht Rugby
) . Golfer Padraig
and the Irish
also enjoys sponsorship from the bank.
2008 share price collapse
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
Quality of Audits Questioned
The annual profitability as at Feb 2007, was subsequently published
as €1.95bnThe 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
Although there has been a substantial drop in profits, the drop in
the share price is much greater than would be appropriate, based
upon the published results and the interim statement of 13 Nov
2008There is a very substantial gap between the confident but
cautious tone of the announcements of 13 Nov and the newspaper
reports of the following day, typical of which is that of the Irish
Independent "Analysts not convinced of Goggin Case".Clearly, both
the media and the brokers and analysts have little confidence in
the management of the company.The second and more serious problem,
(which, it must be said, remains unacknowledged by bank management,
the financial regulator and the Irish government) is
. The question
concerning solvency has arisen due to domestic problems in the
crashing Irish property
. Bank of Ireland, like most Irish financial
institutions, has exposure to property developers in their loan
portfolio. These property developers are currently suffering from
gross over-supply of property, much still unsold, while demand has
evaporated. The massive immigration from Eastern Europe which had
propped up demand has now reversed due to rapidly rising
unemployment in Ireland. Irish property developers own speculated
billions of Euros of overvalued land
parcels such as urban brownfield and greenfield sites, and also
agricultural land at an average value of €23,600 per acre ($32,000
per acre or €60,000 per hectare) which is several multiples
the value of equivalent land in other European
Irish banks correctly identify a systematic risk of triggering an
even more severe financial crisis in Ireland if they were to call
in the loans as they fall due. The loans are subject to terms and
conditions, referred to as "covenants". These covenants are being
waived in fear of provoking the (inevitable) bankruptcy of many
property developers and Irish banks are thought to be "lending
some developers further cash to pay their interest bills, which
means that they are not classified as 'bad debts' by the
". Furthermore, Bank of Ireland's impairment provisions
are not being increased correspondingly on their balance sheet.
Their accounts for the last financial year states a bad debt
provision of only €46 million which is a reduction
of 8% from the previous year. This does not appear to be consistent
with the real negative changes taking place in property market
fundamentals. It should be said, however, that this is in line with
most financial institutions' projected figures; doubtless a more
realistic estimate will be made when next their accounts are
published. In late 2006 the Chief Economist of Bank of Ireland
Dr Dan McLoughlin
claimed that house
prices would increase another 12% by the end of 2006 to reach an
average national house price of €395,000
half a million dollars
on average). In retrospect,
the claim, made at the height of the Irish property bubble, was
completely inaccurate, doubtless in hindsight many banks are
regretting their lending decisions made during this time.
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.
An interesting footnote to this story is that, on 7th of October
2008 Danske Bank
wrote off a substantial
sum which included property-related losses incurred by its Irish
subsidiary - National Irish
. Write downs by the domestically-owned Irish banks are
only now beginning to take place. Rumours circulated that Spain's
had expressed an
interest in acquiring Bank of Ireland but the acquisition was not
undertaken when due diligence had been undertaken. This was
subsequently denied by Bank of Ireland.
- Irish Times on rescue package Feb 2009
- Data theft involving 10,000 bank records RTÉ News, 21
- BoI kept quiet about stolen client details since
February Irish Independent, 23 April 2008
- Bank of Ireland Life - Customer Update on Stolen
Laptops Bank of Ireland Press Room, 22 April 2008
- Bank of Ireland Life - Update on Stolen Laptops
Bank of Ireland Press Room, 28 April 2008
- BKidnap gang steals €7 million from Bank of
Ireland Times Online, 27 February 2009