By Andras Gergely
DUBLIN, Feb 26 (Reuters) - Postbank, a joint venture between Ireland's post office and Belgian bank BNP Paribas Fortis, will wind down its business by the end of 2010, in a move which the government said was part of the natural shrinking of the sector.
Postbank, which said it saw no prospect of making a profit in the current Irish market, became the second foreign-owned lender to announce this month it was pulling out of retail banking in the country.
Its announcement came hours after Dublin's plans to clean up the sector got a boost when the European Union approved its 54 billion euro 'bad bank' scheme, the National Asset Management Agency (NAMA).
'I am disappointed but I have to say I am not totally surprised,' Irish Finance Minister Brian Lenihan said of the Postbank move. 'We can't have a limitless number of banks in Ireland,' he told public television RTE.
Postbank was run by the post office and Fortis until Fortis was broken up with its Belgian and Luxembourg banking businesses sold to France's BNP Paribas.
Postbank, which employs 260 people directly and has a large retail presence via more than 1,000 post offices, was the only lender with a foreign parent to apply for Ireland's guarantee scheme for bank liabilities in 2008.
Earlier this month, Britain's Lloyds Banking Group PLC said it would close its fledgling retail banking operation in Ireland, cutting some 750 jobs as the unit was too small to survive the post-crisis environment.
Analysts have expected some of the Irish units of other foreign banks -- which include Danske Bank, KBC Groep and Royal Bank of Scotland Group -- to beat a retreat as well.
'A number of factors have led the shareholders to this decision,' Postbank Chairman Thierry Schuman said. 'They include the unprecedented circumstances in which the financial services sector finds itself, the highly competitive savings market within Ireland and the absence of a perspective of profitability in current market circumstances.'
(Editing by Hans Peters) Keywords: IRELAND POSTBANK/ (andras.gergely@thomsonreuters.com; + 35315001518; Reuters Messaging: andras.gergely.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
DUBLIN, Feb 26 (Reuters) - Postbank, a joint venture between Ireland's post office and Belgian bank BNP Paribas Fortis, will wind down its business by the end of 2010, in a move which the government said was part of the natural shrinking of the sector.
Postbank, which said it saw no prospect of making a profit in the current Irish market, became the second foreign-owned lender to announce this month it was pulling out of retail banking in the country.
Its announcement came hours after Dublin's plans to clean up the sector got a boost when the European Union approved its 54 billion euro 'bad bank' scheme, the National Asset Management Agency (NAMA).
'I am disappointed but I have to say I am not totally surprised,' Irish Finance Minister Brian Lenihan said of the Postbank move. 'We can't have a limitless number of banks in Ireland,' he told public television RTE.
Postbank was run by the post office and Fortis until Fortis was broken up with its Belgian and Luxembourg banking businesses sold to France's BNP Paribas.
Postbank, which employs 260 people directly and has a large retail presence via more than 1,000 post offices, was the only lender with a foreign parent to apply for Ireland's guarantee scheme for bank liabilities in 2008.
Earlier this month, Britain's Lloyds Banking Group PLC said it would close its fledgling retail banking operation in Ireland, cutting some 750 jobs as the unit was too small to survive the post-crisis environment.
Analysts have expected some of the Irish units of other foreign banks -- which include Danske Bank, KBC Groep and Royal Bank of Scotland Group -- to beat a retreat as well.
'A number of factors have led the shareholders to this decision,' Postbank Chairman Thierry Schuman said. 'They include the unprecedented circumstances in which the financial services sector finds itself, the highly competitive savings market within Ireland and the absence of a perspective of profitability in current market circumstances.'
(Editing by Hans Peters) Keywords: IRELAND POSTBANK/ (andras.gergely@thomsonreuters.com; + 35315001518; Reuters Messaging: andras.gergely.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
