Irish bank will cut back on lending in UK
According to recent reports a major Irish bank plans to cut back on its mortgage lending operations in the UK, further impacting on the already struggling mortgage market and increasing the difficulties that borrowers face when it comes to getting a mortgage.
Officials from the Bank of Ireland have stated that the bank plans to cut back its UK mortgage book and aims to make annual savings of £30 million.
The leading Irish bank is looking to cut costs, and making this cutback in UK lending will enable it to do this, according to officials. In a statement the Bank of Ireland stated: “As a result of this de-leveraging strategy our UK residential mortgage book, which stood at 29 billion pounds at 30 September 2008, is expected to reduce significantly over an extended period of time.
The bank went on to state: “We will no longer be sourcing new residential mortgage business through the intermediary channel. This is in line with the strategy outlined at our interim results in November 2008 to reduce dependency on wholesale funding through selective balance sheet de-leveraging and to rigorously manage our cost base.”
The bank will still continue to offer mortgages through its joint venture with the UK Post Office, according to reports.
Following the announcement one industry official said: “Today’s announcement really signals the end of Bank of Ireland’s GB retail banking presence, which dates back to the Bristol and West acquisition in 1996. This announcement does not affect the group’s business banking operation in the UK which continues as is.”
With mortgage rationing already set to get tighter over the coming months the decision by the Bank of Ireland could add to the mortgage meltdown that the nation has been experiencing.
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