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Permanent TSB hires Accenture to advise on cost cuts
14 March 2010 By Richard Curran
Permanent TSB has hired management consultants Accenture to draw up proposals for a major cost-cutting plan at the bank.
The bank, which is being separated out from Irish Life, is already in the process of closing 11 branches with the loss of 120 jobs through a voluntary redundancy programme announced last December.
However, it hired Accenture a month ago to conduct a deeper and more detailed review of its options to make greater savings.
The Accenture proposals, due to be presented to the board in the coming weeks, are expected to include significant further redundancies and provide options for increasing the bank’s revenues.
A spokesman for Permanent TSB confirmed that it had hired Accenture, which he said was ‘‘in line with the stated plan to reduce costs further."
The spokesman said that ‘‘cost cuts will be a substantial part of the [Accenture] plan’’ and that it would also include identifying opportunities to grow revenue.
Irish Life & Permanent said earlier this month that it would raise up to €600 million in capital for Permanent TSB, before spinning off the loss-making bank.
The group is hoping to find a home for it in a merger with one of the other players in the market, but this is by no means certain.
Before the branch closures announced last December, the bank had 103 branches. It relied too heavily on wholesale funding from other banks during the boom years, and now needs a major capital injection from its parent company.
Impaired loans at the country’s biggest mortgage lender totalled €828 million, or 2.1 per cent of Permanent TSB’s €38.9 billion loan book. This was up from €202 million, or 0.5 per cent of loans, a year earlier.
Gross new lending fell sharply to €1.2 billion during the year, down from €7.1 billion last year.
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