KBC has decided to stay in Ireland - 1,000 jobs saved

Discussion in 'The Fair Mortgage Rates Campaign' started by Deiseblue, Feb 9, 2017.

  1. Deiseblue

    Deiseblue Frequent Poster

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    As an added bonus from a Trade Union perspective a large number of staff joined the Finance Union when the issue of staying or not was up in the air.
     
  2. Brendan Burgess

    Brendan Burgess Founder

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    It always astonishes me to hear on the news "1,000 jobs saved" by this decision.

    No there weren't. If KBC closed down, the business would go elsewhere and there would be no net effect on jobs.

    Likewise, Centra claimed it was going to create 460 new jobs when it opens 20 new stores. No they won't. They will presumably just take them from other stores.

    Brendan
     
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  3. aristotle

    aristotle Frequent Poster

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    Of course there would be an affect on jobs in Ireland. If KBC closed down and KBC customers went to AIB\BOI etc you are not going to see those other banks recruiting 1000 new employees as a direct result.
     
  4. WorstPigeon

    WorstPigeon Frequent Poster

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    That's assuming that KBC (or Centra) is exactly as productive as their competitors, and that their mere presence does not change consumer behaviour.
     
  5. Ceist Beag

    Ceist Beag Frequent Poster

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    I know you made this argument before Brendan but it really isn't an argument that stands up very well. If KBC closed down those 1000 employees would be out of work. You're claiming they would all get work in other banks but that is quite the claim tbh. There is absolutely no guarantee of this and the likelihood is that some would find employment in other banks, some might decide to retire early, some might look for a change of career, some might continue trying to find alternative work and some might head abroad. So there may not be 1000 jobs lost as a result but to claim that "there would be no net effect on jobs" is not really credible.

    Likewise with the Centra argument, sure of the 460 there will be a certain number who will be poached or attracted from competitors but there will no doubt be a certain number recruited from unemployment. I think you have more of an argument there that the 460 number is false but I wouldn't hammer them over it!
     
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  6. jim

    jim Frequent Poster

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    also...if some of those 460 were poached from elsewhere then the knock on effect (by Brendan's logic) is that there would again be poaching from others and so on until eventually the unemployed would be poached from the midst of their idleness.

    So there would be a net effect on jobs of circa 1000.
     
  7. Brendan Burgess

    Brendan Burgess Founder

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    Sure the 1,000 KBC people would have lost their jobs.

    But 1,000 new jobs would have been created in other banks. It won't be the same 1,000 people. A lot of them will get new jobs.

    If a new mortgage lender enters the Irish market and employs 200 people, there will be corresponding losses in other banks.

    If KBC is more efficient than the other banks, then more than 1,000 new jobs will be created. If they are less efficient, then fewer than 1,000 will be created.

    Brendan
     
  8. Trustmeh

    Trustmeh Frequent Poster

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    Are you being serious? This is such flawed logic it's scary.

    You think any banks are creating jobs? Lololololol. To keep UP with the competition? Lololololol. this. Is. So. Silly. You must know zero bankers.
     
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  9. Ceist Beag

    Ceist Beag Frequent Poster

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    Again Brendan I think your logic is seriously flawed there. You are assuming the same business will be conducted no matter how many banks are here. That is a big flaw in your logic. KBC may have been offering services that other banks do not offer. People may have decided to do something with KBC that they would otherwise not do (i.e. take out a loan or open a second savings account, etc.) so if KBC were to close that business could simply be lost. There is absolutely no guarantee that 1000 new jobs would have been created in other banks - imho it is very likely that a very small number of new jobs would have been created in other banks were KBC to leave. Another thing to consider is that KBC, were they to leave, would probably be leaving as it was uneconomical to remain - further indicating that there isn't enough work here for 1000 people so to think that there are 1000 jobs in the banking industry if they leave just doesn't make sense.
    Just to see if your logic holds any water, how many of the 750 jobs lost when Halifax (Bank of Scotland) left Ireland were moved to other banks? Is the total number employed in banks still the same now as it was when we had Halifax here?
     
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  10. Brendan Burgess

    Brendan Burgess Founder

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    Let me put it another way.

    Which would lose the more jobs - KBC, employing 1,000 people closing down, or HP employing 1,000 people closing down?

    Or yet another way.

    Which would be better news for jobs? Santander announces that it will enter the Irish mortgage market and create 200 "new" jobs or a pharma company setting up a manufacturing unit in Ireland for export which promises to create 200 new jobs?

    There really is no comparison.

    Brendan
     
  11. Monbretia

    Monbretia Frequent Poster

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    As an ex bank employee I can assure you that 1,000 lost in one bank will not see 1,000 taken on in the others, if anything they will want the existing staff to do any extra work involved with no increase in staff and to be honest a lot of that would be possible if the customers of KBC were spread over the rest of the banks.
     
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  12. thedaddyman

    thedaddyman Frequent Poster

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    If KBC closed, 1000 people would lose their jobs, + others in suppliers such as cleaners, IT support companies, etc. True job losses would likely to be in excess of 1250-1500.

    The other banks would absorb the business and leverage their existing resources and technology to deal with that extra business. Yes, they make take on a few extra staff but it would likely to be a fraction of the KBC numbers. To think 1000 job losses because 1 company closes automatically translates into 1000 jobs in another company if customers migrate there is bizarre, real business just doesn't work like that
     
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  13. Setanta12

    Setanta12 Frequent Poster

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    I love it when the accounting firms speak of hiring 300 / 400 / 500 people in any one year; this is simply the churn rate. Train 'em up and ship 'em out (when they're qualified and look for proper wages).
     
  14. Brendan Burgess

    Brendan Burgess Founder

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    I am really astonished at the efficiency of the Irish banking system, or is it their inefficiency?

    Apparently, KBC can close down and its 60,000 home mortgage holders, its 10,000 (?) buy to lets , its commercial mortgages and its deposits can all be handed within the existing capacity of the 4 remaining banks. They must have an awful lot of staff sitting around doing nothing.

    Brendan
     
  15. Ceist Beag

    Ceist Beag Frequent Poster

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    Just because they close their Irish branches (if they did go ahead) would not necessarily mean the mortgages have to be switched another Irish bank so why do you assume this would happen? It didn't happen when BOSI left did it. As I've already explained on the deposits, people could very well have opened a second savings account with KBC so all that would happen there is that they could move the money back to another account in another bank - no extra staff needed there!
     
  16. MrEarl

    MrEarl Frequent Poster

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    I don't agree that there would be a perfect match to offset the jobs lost Mr. Burgess, well certainly not over the medium term (whatever about short term).

    If we look at previous examples such as: Bank of Scotland, ACC Bank, Danske etc. as they closed their businesses.... it took a few years in each case to wind reduce the size of their operations, so the jobs were not lost over night. That allowed time for some staff to look for and secure work elsewhere. Secondly, these Banks transferred the management of their loan books to outsource providers (i.e. Pepper, Capita or Certus) who in turn employed significant numbers of the staff previously employed by the Bank in question (but sometimes, this was only a short term arrangement).

    I do agree with the point made above when it comes to the remaining banks sucking up the business that is left when a Bank exits, such as if KBC departed and their customers were sucked up by the remaining Banks... existing staff would be pressed quite hard to take on more work as the custom came in, the exact ratio of staff to customers would not be maintained, hence there is not a 100% match against the overall jobs which might be lost.

    All of that said and done, I consider the KBC situation to have been very badly handled - there was no need for them to take 3 years to make this announcement, KBC Ireland returned to profit, the economy is growing, there is far less banking competition so better margins can be obtained, they were advertising, opening branches etc. Had they wanted to get out of Ireland, they would have left a few years ago and not been thinking about leaving now things are good (for the Banks) again. Makes little or no sense when considered solely on circumstances in KBC Ireland and if anything, reflects badly on KBC management for dragging it out so long.... finalised with a bit of poor form propaganda this week when they did finally come out and make the long awaited annoucement.