Isle of Man loses another bank

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Permanent Bank International, the Isle of Man bank that was created by the acquisition of Irish Nationwide (IoM) by Irish Life & Permanent in 2011, is to be wound down by its Dublin-based parent, now known as Permanent TSB.

It is understood 12 jobs stand to be lost when the bank finally closes its doors for the last time, when it will join a growing list of closures by banks located in offshore jurisdictions that have taken place in the wake of the global financial crisis.

In a statement on its website on Wednesday, Permanent Bank International said its Irish Stock Exchange-listed parent had recently concluded a strategic review of all of its operations, including Permanent Bank International Ltd, and taken the decision “to close PBI and begin an orderly wind-down process of the business”.

“The Bank is in the process of notifying all customers of the decision, and will start closing their accounts in the near future and will complete the process by end of 2017,” the statement added.

It quoted Permanent TSB group chief executive Jeremy Masding as saying: “The group’s focus is on growing market share in the Irish retail and SME markets. It was a difficult decision to wind down PBI, given the long history it has in the Isle of Man, and I would very much like to thank our excellent management team and staff for their contribution to the business.

“I would also like to take this opportunity to thank all of our customers for their ongoing support over the past 24 years.”

Before the financial crisis, PBI had been the offshore outpost of Irish Nationwide, but was then acquired by Irish Life & Permanent in February, 2011. Irish Life & Permanent ultimately became Permanent TSB Group Holdings, following further changes that occurred in the wake of the financial crisis, which hit certain Irish banks particularly hard. Permanent TSB is 74.92% owned by the Irish government, with 25.08% owned by private shareholders.

Offshore banks struggling

As reported, island jurisdictions around the world have been struggling to keep local banks on their high streets, as regulations have increased, interest rates are at historic lows, and many are still recovering from the 2008 financial crisis.

This year alone saw Nationwide International, the Isle of Man-based offshore unit of the UK Nationwide group, announce plans to close its doors this summer, and the beginning of the winding down of the Isle of Man’s Duncan Lawrie private banking operation, following the parent company’s acquisition.

In the immediate aftermath of the financial crisis, the IoM saw other banks disappear, including the Isle of Man’s outpost of London’s Kaupthing Singer & Friedlander, which went into administration in 2008, causing severe problems for many Isle of Man depositors.

Last year, the Isle of Man approved new legislation aimed at encouraging new banks to set up on the island. The new, so-called Alternative Banking Regime (ABR) framework followed a consultation with the industry.

The government of Gibraltar took matters into its own hands in 2015, when it opened its own lending institution, the Gibraltar International Bank, to fill what it said was a need in the marketplace that had resulted from the departure of a number of key banks, including Barclays.

The news of the closure of its Isle of Man operation came as Permanent TSB posted its first-quarter earnings, ahead of its annual general meeting in Dublin on Wednesday.

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