Halifax Closing?

brettmirl

There was an article in the Sunday Tribune yesterday which said that Halifax was shutting up shop in this country. Anyone know if its true or not?

I moved my mortgage to them just over a year ago, saved a small fortune!



http://www.tribune.ie/business/news/article/2009/jul/12/halifax-set-to-close-after-direct-orders-from-uk-t/

Bank of Scotland Ireland (BOSI) is preparing to shut down Halifax, its retail arm, beginning in September following explicit instructions from the UK treasury to cease lending in Ireland and repatriate €20bn of its €35bn in Irish assets under the UK government asset protection scheme (GAPS).

The move is the culmination of an extensive strategic review, dubbed Project Primrose, begun by the bank after the UK government engineered the rescue of BOSI's Edinburgh-based parent bank, HBOS, last September by forcing it to merge with Lloyds TSB, which is now 43% state-owned.

The outcome of Project Primrose, which was discussed at a board meeting two weeks ago, and the orders coming from the UK have bitterly divided the executive committee which runs BOSI in Dublin, leading to the departure last week of head of retail banking Antoinette Dunne - considered a rising star and possible successor to chief executive Joe Higgins.

According to informed sources, two more executives are planning to depart "within weeks" over the changes. The discord became so serious last week that Lloyds dispatched UK executive Jo Dawson to Dublin on Thursday to help quell the unrest.

The bank is planning to formally announce the restructuring at the end of August as part of a larger strategic statement by Lloyds, sources said. After the changes, BOSI would comprise a "rump" bank made up of its business banking division and possibly the savings and investments side of the retail business. The property development lending business will all but disappear when the €20bn in assets transfers to the UK parent bank's balance sheet.

A BOSI spokesman said it was bank policy not to comment on strategy.

Halifax opened in January 2006 after BOSI acquired the 54-branch ESB shop network, immediately establishing it as a high street presence and so-called "challenger brand" to the established retail banks. Building on the work of BOSI's personal banking, Halifax tried to peel off existing customers from AIB and Bank of Ireland by offering innovative products such as tracker mortgages, interest-bearing current accounts and 0% interest credit cards.

BOSI lost €250m in 2008 after taking a €553m impairment on bad loans. Halifax has effectively withdrawn from all new lending this year, according to sources, through uncompetitive pricing on mortgages and other loans.

BuffyBot

Anyone know if its true or not?

Nothing but speculation at the moment. The fact that no where else is running with the story apart from the Irish media seems to indicate that it may not be true.

At the end of the day the only people who will know for sure are the Lloyds Banking Group top level folks.

Anyway - it would be a tough operation for them to sell off IMHO. Too small to attract the likes of international big fish such as Santander I suspect, and none of the domestic banks are in shape for an acquisition...

herya

I've read that too, I'd be so sad to lose my Visa debit card which does Paypal, Amazon & all... I hated my BOI account, things were so smooth with Halifax! No I'm not a shill, just genuinely happy with their service - I set it up once and not a slightest problem since.

Breezer

herya wrote: »

I've read that too, I'd be so sad to lose my Visa debit card which does Paypal, Amazon & all... I hated my BOI account, things were so smooth with Halifax! No I'm not a shill, just genuinely happy with their service - I set it up once and not a slightest problem since.

+1

stepbar

Bit of a funny time to be running a television campaign..... It doesn't suprise me one bit that BOSI is thinking of pulling Halifax from the market. However I suspect that, Halifax will remain and compete as an phone / internet only bank offering a broader service than the likes of Rabo. I would also say that you'll see the vast majority of branches closing down and sold off. Perhaps you'll see the regional centre branches (e.g Dublin, Galway, Cork etc) remaining as Halifax / BOSI business centres.

I would say mortgages will probably cease to be offered due to the work involved. They will probably continue to offer credit cards / current & savings a/c's over the phone / internet.

One thing that definatly won't happen is a lock stock and barrel closure. They just wouldn't be able to do it in an orderly fashion.

100gSoma

herya wrote: »

I've read that too, I'd be so sad to lose my Visa debit card which does Paypal, Amazon & all... I hated my BOI account, things were so smooth with Halifax! No I'm not a shill, just genuinely happy with their service - I set it up once and not a slightest problem since.

+2

The Visa debit card, and the opening on Saturday mornings are brilliant. hope someone will acquire them and keep it going under the same setup.

Klingon Hamlet

I also found it odd that it didn't make headline news. The retail arm of one of the most forthright and up-and-coming banks in the country is due to be closed down, and it was given an undignified short-shrift in the business section of today's Irish Independent, like a half-remembered dream?

There's likely to be a lot of staff worrying about their futures at the moment. Never mind the large quantity of customers who switched over to avail of high interest savings and current accounts.

Which brings me to the reasoning behind the shut-down (or potential shut-down). They were trying to undercut everyone with their deposit rates, and didn't they recently throw a large lump of money into financing more mortgages for needy prospective homeowners where everyone else was rejecting applications? Perhaps they bet ona quick recovery and didn't allow for the fact that:

a) We're hitting a depression of unbelievable magnitude (people didn't have credit cards or huge-multiple-of-income mortgages during the last crash. More to lose, more suffering imminent, arrrgghh...

b) The UK Treasury didn't bail them out only to watch their generosity go to the Irish Republic's faltering economy. The Treasury invested and expects a pure and decent return, Irish be bu99ered

c) Beating everyone else in rates is all well and good when the return outweighs the costs. They failed there miserably.

I for one am most concerned about what happens the staff, and what happens the customers' mortgages (specifically will they be shafted with high-interest loans offered by the new buyers? Can this happen?).

Be interesting to see the coverage this gets, if any. Strange...so strange that such a large and terrible event in the banking sector has so far gone without nary a blip on the media radar.

jaffa20

Hope not, i'm in the process of moving to them from ulster bank who have been useless of late. The visa debit card is attractive.

Klingon Hamlet

"A BOSI spokesman said it was bank policy not to comment on strategy."

AKA "Yes but don't quote me on that." This all sounds awfully genuine.

uberwolf

Klingon Hamlet wrote: »

"A BOSI spokesman said it was bank policy not to comment on strategy."

AKA "Yes but don't quote me on that." This all sounds awfully genuine.

what it means is everything is on the table, and we'll tell the staff before we tell you.

herya

Klingon Hamlet wrote: »

Be interesting to see the coverage this gets, if any. Strange...so strange that such a large and terrible event in the banking sector has so far gone without nary a blip on the media radar.

Irish Independent did an article today.
http://www.independent.ie/business/irish/halifax-set-to-close-retail-division-here-after-order-by--uk-treasury-1818866.html

stepbar

uberwolf wrote: »

what it means is everything is on the table, and we'll tell the staff before we tell you.

Exactly. But there must be some weight to the Tribune story as the Indo has been angling up to this for a while - (http://www.independent.ie/business/irish/uk-banks-would-struggle-to-sell-irish-operations-1799182.html) i.e with the suggestion that BOSI would have a job selling Halifax. When I heard that Antoinette Dunne was quitting after 20years in the bank I also found that strange. When you get to that point in your career with the one org, you don't take the decision lightly. With the recession and everything that's happening, the story does sound more credible.

Breezer

Still nothing from the Irish Times, RTE or BBC though. I'm holding out hope.

herya

stepbar wrote: »

However I suspect that, Halifax will remain and compete as an phone / internet only bank offering a broader service than the likes of Rabo.

Personally I wouldn't mind, I had excellent experience with similar setups overseas. As long as I can keep my Visa debit I'm in!

stepbar

That's fair enough but for Business customers it will be a nightmare. The money is to be made in Business / Corporate banking and as such they need facilities such as a branch network (especially cash businesses). Personal banking is a very small part of overall banking. Back when Halifax / BOSI was going well, profit from the network was c20mil vs c230mil from Business / Corporate banking.

Slice

So basically the only reports of it at the moment are from the IN&M papers as well as the Sunday Business Post which is renown for indulging in rumour and speculation...

ibuprofen

Yeah read it today in the examiner online....... I think it was only a matter of time with the english exchequer owned banks......

''However an industry source said Halifax has been "effectively out of the market for some time and has stated as much with its excessive borrowing costs of 7% and greater".

http://www.irishexaminer.com/business/halifax-remains-unsure-of-plans-96301.html#ixzz0LER5DASI&D

How's ulster bank doing....

Bomany

Was in the Halifax branch today and obviously asked teller what was going on. She tried to sound convincing by saying that it was speculation. But it sounded as if she was going through the motions. I don't blame her - she is probably going to lose his job at the end of August. But I immediately went across the street and made an appointment to switch my current account to Permanent TSB. It is a shame because I found Halifax a very good bank to deal with. Unlike the big two they looked after the small customer well. Halifax going is a blow to competition in the Irish banking sector.

I think that there is so much uncertainty now that Halifax management need to make a definitive statement as to their intentions now rather than wait until August.

Laphroaig52

What would be likely to happen with existing mortgages if they did pull out?

Would they be sold to another Irish bank or could they also be 'repatriated' to the UK?

Could they change the T&Cs of an existing mortgage...e.g. 'No more tracker rates for you buddy'?

Bomany

With regard to mortgages I suppose Bank of Scotland Ireland will still operate here and the Halifax mortgages could be administered by them.

jaffa20

Bomany wrote: »

Was in the Halifax branch today and obviously asked teller what was going on. She tried to sound convincing by saying that it was speculation. But it sounded as if she was going through the motions. I don't blame her - she is probably going to lose his job at the end of August. But I immediately went across the street and made an appointment to switch my current account to Permanent TSB. It is a shame because I found Halifax a very good bank to deal with. Unlike the big two they looked after the small customer well. Halifax going is a blow to competition in the Irish banking sector.

I think that there is so much uncertainty now that Halifax management need to make a definitive statement as to their intentions now rather than wait until August.

What??

Nothing has been confirmed yet. You shouldn't have left them if you liked them. A bank teller would be clueless about something like this at this stage. I just sent in documents this week to open a current account with them and switch from ulster bank. Hope they don't close but if they do it's not like we'll lose our money.

Klingon Hamlet

jaffa20 wrote: »

What??

Nothing has been confirmed yet. You shouldn't have left them if you liked them. A bank teller would be clueless about something like this at this stage. I just sent in documents this week to open a current account with them and switch from ulster bank. Hope they don't close but if they do it's not like we'll lose our money.

But willthe money be refunded through the government scheme, and if so, what's the timeframe for said refund? Especially as it's clear state money is deep in the red at the moment. "Guarantee" is a bit of an oxymoron with our economy in the doldrums, especially when dished out by a headless government.

dotsman

Halifax ruled itself out of the game a long time ago with their ridiculously high mortgage rates.

At this stage, I think it's a question of when and not if. Their business model was completely wrong - attract customers with it's ryanairesque daily banking policies and flood the place with credit to pay for it all. Now, Lloyds, who own Halifax, are up the creek and are contracting in the hope of survival.

I, for one, won't miss them.

Do sympathise with their staff though!

stepbar

http://www.independent.ie/business/european/lloyds-injects--8364700m-into-loss-making-irish-unit-1824429.html

700 million injection.......... wow

BuffyBot

Klingon Hamlet wrote: »

But willthe money be refunded through the government scheme, and if so, what's the timeframe for said refund? Especially as it's clear state money is deep in the red at the moment. "Guarantee" is a bit of an oxymoron with our economy in the doldrums, especially when dished out by a headless government.

This has nothing to do with anything. Halifax hasn't collapsed, therefore that scheme is irrelevant. With the UK government owning such a substantial share of them, they won't just vaporise..

If (and it's a BIG if) they pull completely out of the market, it would be a phased withdrawal over a period of time, with plenty of time for people to make alternate banking arrangements and move funds to other institutions.

I, for one, won't miss them.

You know that there is something rather distasteful about someone who works for a competitor acting in such a spiteful way. One can only speculate if you'll feel so happy in a few years time when our domestic big banks have been chopped up, minced and shaped like Turkey twizzlers and sold off to bigger, international groups who'll pare them down considerably..

Just because you, personally, don't like their style doesn't mean that they haven't shaken up an extremely stale on old-boys-club like market. There has actually been very little wrong with their business model really. Like businesses across many industries they just are a victim of timing. Again if, - the big if comes into play - they do leave, the Irish banking market will be a much, much poorer place for it.

dotsman

BuffyBot wrote: »

You know that there is something rather distasteful about someone who works for a competitor acting in such a spiteful way. One can only speculate if you'll feel so happy in a few years time when our domestic big banks have been chopped up, minced and shaped like Turkey twizzlers and sold off to bigger, international groups who'll pare them down considerably..

Trust me, that comment was just me as an ex-customer. For all their talk, and ads about b/w-ankers, I had the worst customer service experience with them than any other bank I've ever dealt with (and I've dealt with many). I fully accept that there will be people who banked with them who never had a problem and who did have problems with the Irish banks, but for all the difficulties/errors I experienced with other banks, I've always been able to rectify them once I escalated the matter. Doing so with Halifax only seemed to make things worse.

As already said, I do feel for the staff who are now worrying about their jobs. This is not their fault, and I do hope redundancies are kept to a minimum or none at all (unfortunately unlikely, but one can hope).

BuffyBot wrote: »

Just because you, personally, don't like their style doesn't mean that they haven't shaken up an extremely stale on old-boys-club like market. There has actually been very little wrong with their business model really. Like businesses across many industries they just are a victim of timing. Again if, - the big if comes into play - they do leave, the Irish banking market will be a much, much poorer place for it.

In my opinion, they (and other banks), supported by the media shook up the "old-boys-club" in a bad way. It was the loss-leading tactics of free banking (with interest, effectively banks are paying their customers to be with them), and enticing short-term discounts that that led banks into the problems they now face.

Having to cover the losses from daily banking, dealing with a market becoming saturated with competition, and extremely competitive interest rates left the banks with only one avenue to grow profits - economies of scale with regards lending - ie greatly increase the amount of money they were lending.

BuffyBot

At this stage, I think it's a question of when and not if. Their business model was completely wrong - attract customers with it's ryanairesque daily banking policies and flood the place with credit to pay for it all. Now, Lloyds, who own Halifax, are up the creek and are contracting in the hope of survival.

I, for one, won't miss them.

See, your bad personal experience wasn't what you coupled your statement too initially, so forgive me if I take what you in the first instance at face value. You attached it to an attack on their business model. Offering loss-leader products is standard practice when launching a new business into a crowded market - it's how you get new customers. Nothing unusual or incorrect in what they were doing at all. Perfectly logical, actually.

So to turn about and then try and qualify your statement by hitching it up to something else entirely strikes me as a bit of goalpost changing. It's a shame that you got bad service from an organisation, but wishing an entire company out of existance because of that - despite their provision of perfectly fine service to others - is melodramatic at best. To say you "feel sorry" for those who might lose their jobs if your wish came through - that's just balls. By hoping Halifax leave the Irish market, you're hoping a lot of people lose their employment. I doubt your feeling sorry will be of bugger all comfort to them.

In my opinion, they (and other banks), supported by the media shook up the "old-boys-club" in a bad way. It was the loss-leading tactics of free banking (with interest, effectively banks are paying their customers to be with them), and enticing short-term discounts that that led banks into the problems they now face.

If you truely think that offering free personal banking has contributed to the situation that Irish banks found themselves in, I'd be very surprised. Even with charges, personal banking (especially current accounts) contributed a minimal amount to banks profits. Current accounts for personal customers are a loss leader across the board, charges or no charges. They're merely a tool used by banks to enable people to take on other products from their suite which are much more profitable (insurance, lending, mortgages, savings and investments etc).

dotsman

BuffyBot wrote: »

See, your bad personal experience wasn't what you coupled your statement too initially, so forgive me if I take what you in the first instance at face value. You attached it to an attack on their business model.

I didn't attach it, it's a completely separate paragraph. Likewise, the paragraph after states "Do sympathise with their staff though!", yet you've completely managed to "un-attach" that!

BuffyBot wrote: »

Offering loss-leader products is standard practice when launching a new business into a crowded market - it's how you get new customers. Nothing unusual or incorrect in what they were doing at all. Perfectly logical, actually.

Just because something is standard, those not necessarily mean it's a good thing. Offering loss-leaders may be common in many sectors, but are usually not associated with something as long-term and as potentially deadly as mortgages/long-term loans. Instead of the media cheering them on, with the one-and-only Eddie Hobbs encouraging people to credit card hop, the media should be focused on the Financial education and encouraging people to choose what the best bank/product is in the long-term.

If tesco give their bread and milk away for free to bring in more customers, and hopefully sell more of their high-priced products, that's ok. Why? Because the customer is only making a number of one-off, low-cost transactions (ie each shopping trip they decide what is best for them, and each transaction is only a saving/loss of a few quid). With banking, many customers signed up to 30, 35, 40 year mortgages on the back of these loss-leaders. Saving themselves a few quid at the start will result in (potentially) tens of thousands. What you must realise is that the regulator can put all those warning statements on documents, but in the end, the vast majority of people are financially uneducated, and often make rash, uncalculated decisions, based solely on a short-term view. For a large part, it's just human nature.

How many people switched bank/product over the past few years and now finds themselves with a much more costly bank/product?

BuffyBot wrote: »

So to turn about and then try and qualify your statement by hitching it up to something else entirely strikes me as a bit of goalpost changing. It's a shame that you got bad service from an organisation, but wishing an entire company out of existance because of that - despite their provision of perfectly fine service to others - is melodramatic at best. To say you "feel sorry" for those who might lose their jobs if your wish came through - that's just balls. By hoping Halifax leave the Irish market, you're hoping a lot of people lose their employment. I doubt your feeling sorry will be of bugger all comfort to them.

You obviously have a chip on your shoulder about this, and are reading into everything the wrong way, so this is my final post on this thread.

Where did I say I was "wishing an entire company out of existance"? How does "hoping Halifax leave the Irish market" equal "hoping a lot of people lose their employment". Please read my original post again:

Dotsman wrote:

I, for one, won't miss them.

Do sympathise with their staff though!

I won't miss them. Some posters were saying how they were going to miss some of halifax's products/services etc. I was merely stating that I won't. That doesn't mean I wish them out of existence or I want to see their staff suffer. It just means, that I-am-not-going-to-miss-them. The fact that this statement is accompanied with a "Do sympathise with their staff though!" I think makes my intentions pretty clear, so please stop twisting everything I say into the very opposite of their true meaning.

BuffyBot wrote: »

If you truely think that offering free personal banking has contributed to the situation that Irish banks found themselves in, I'd be very surprised. Even with charges, personal banking (especially current accounts) contributed a minimal amount to banks profits. Current accounts for personal customers are a loss leader across the board, charges or no charges. They're merely a tool used by banks to enable people to take on other products from their suite which are much more profitable (insurance, lending, mortgages, savings and investments etc).

Is it the sole cause? Of course not. Has it contributed? Yes, I believe it has. Is it a symptom/factor? Yes. Everything about this current mess is, in one way or another, down to people only taking a short-term view.

Banking is far too important (both on a micro and macro level) to allow such rash decisions been made. We wouldn't allow it in our health sector. Can you imagine if there were "first 5 pills free" promotions and "10% off" certain treatments during January? When dealing with health, you want the best treatment for the long term benefit of the patient. Likewise, it should be with Financial health. Get rid of the gimmicks. Customers should be making informed decisions that are in their best long-term interest. Likewise, Banks should focus on long-term growth and not short term gimmicks/gambling.

herya

dotsman wrote: »

In my opinion, they (and other banks), supported by the media shook up the "old-boys-club" in a bad way. It was the loss-leading tactics of free banking (with interest, effectively banks are paying their customers to be with them), and enticing short-term discounts that that led banks into the problems they now face.

Having to cover the losses from daily banking, dealing with a market becoming saturated with competition, and extremely competitive interest rates left the banks with only one avenue to grow profits - economies of scale with regards lending - ie greatly increase the amount of money they were lending.

I disagree, there are countries where free personal banking is pretty much standard and the banks are doing fine - but they were not giving out mortgages secured against soap bubbles.

mickoneill30

I for one hope they don't close. No huge queues, open during a Saturday, treat customers great when you go in (their phone support isn't great though), good interest on your accounts and they have a visa debit card.

That kind of system obviously has no place in Irish society. I don't want to go back to queining for half an hour just to do a piddly transaction.

BuffyBot

dotsman wrote: »

Just because something is standard, those not necessarily mean it's a good thing. Offering loss-leaders may be common in many sectors, but are usually not associated with something as long-term and as potentially deadly as mortgages/long-term loans.

So you're trying to say they had a more irresponsible mortgage lending policy then the domestic banks? I've seen no evidence of that.

The loss leaders the did offer were mostly on the relatively small-ticket items such as current accounts/credit cards. And I wouldn't even call their credit card particularly loss-leading.

If tesco give their bread and milk away for free to bring in more customers, and hopefully sell more of their high-priced products, that's ok. Why? Because the customer is only making a number of one-off, low-cost transactions (ie each shopping trip they decide what is best for them, and each transaction is only a saving/loss of a few quid). With banking, many customers signed up to 30, 35, 40 year mortgages on the back of these loss-leaders.

I don't think that's apropos of anything: it's certainly no different than any of the banks have been doing in Ireland over the last few years.

Saving themselves a few quid at the start will result in (potentially) tens of thousands. What you must realise is that the regulator can put all those warning statements on documents, but in the end, the vast majority of people are financially uneducated, and often make rash, uncalculated decisions, based solely on a short-term view. For a large part, it's just human nature.

How many people switched bank/product over the past few years and now finds themselves with a much more costly bank/product?

To a point, I agree - but that's absolutely nothing to do with Halifax and the price of turnips. One can say the same of customers signing up to every bank.

So - again I believe most of your comments here irrelevant to the topic at hand, and more suited to a discussion about the entire nature of the Irish banking system over the last few years. Alas that falls outside the remit of the forum, so it's a topic for elsewhere.

You obviously have a chip on your shoulder about this, and are reading into everything the wrong way, so this is my final post on this thread.

Not really, I just wanted to question the validity of your attitude, especially as an employee of a rival institution to Halifax, you could hardly be classed as neutral. As I said in my original post, the attitude that came across was very unbecoming in my opinion.

Where did I say I was "wishing an entire company out of existance"? How does "hoping Halifax leave the Irish market" equal "hoping a lot of people lose their employment".

I can hardly imagine you were talking about not missing them while they went on a 2 week holiday to Magaluf? So where else were they going? The only option your statement leads to is them leaving the market. And if they go, people lose jobs - so yes, the correlation between the two is there, no matter how you dress that up.

Is it the sole cause? Of course not. Has it contributed? Yes, I believe it has. Is it a symptom/factor? Yes. Everything about this current mess is, in one way or another, down to people only taking a short-term view.

Again - that's nonsense and I think you know it. Free banking has a negligible effect, if any on the current financial climate. Again the greater causes are a topic for a different forum, but I think people switching banks had about as much impact on the financial crisis as my getting a haircut this morning

Anyway - let's get back to the topic in hands folks and if anybody spots any developments, post them up