Could I put on the record of the House the official reply so that we might have an exchange of questions if it is of some use because I am well aware of this issue? I have already dealt with it in this House in connection with County Kerry and in the other House in connection with one or two other areas. I understand the Senator's frustration as a representative of the people given the dramatic announcements made by AIB in July of this year.
As the Deputy will be aware, and notwithstanding the fact that the State is a significant shareholder in AIB, the Government must ensure that the bank is run on a commercial, cost-effective and independent basis to ensure the value of the bank as an asset to the State, as per the memorandum on economic and financial policies agreed with the EU Commission, the European Central Bank and the IMF. A relationship framework has been specified that defines the nature of the relationship between the Minister for Finance and the bank, in this case AIB. This framework stipulates that the Minister has no role in the commercial decisions of the bank, with these decisions remaining the responsibility of the board and management of the institution.
As the Government has stated previously, the Senator will appreciate that it is an inevitable but unfortunate consequence of the necessary restructuring of the banking system - and return to viability of the sector - that branches in certain towns and villages across the country will be closed. The Government appreciates that the branch closures will have an impact on certain towns and villages but the Department has been informed by AIB that the bank is working very closely with its customers to ensure that the disruption is minimised and to provide a range of alternative banking options, such as use of local post offices and mobile banking facilities to affected customers.
As part of AIB's restructuring plan to return the bank to profitability and reduce dependence on State support, significant cost reductions are required over the coming years. In this regard, AIB announced its branch rationalisation programme in July 2012. The bank's branch overhaul will include a combination of six amalgamations, 16 full branch closures and 45 sub-office closures across the country. In total, 67 locations will be impacted, equating to about 27% of AIB's branch network. It is worth noting that AIB will still have about 200 branches in Ireland post-rationalisation coupled with an additional 80 EBS outlets. Nevertheless, to mitigate the impact of the branch closures on customers, AIB intends to strengthen its long-standing relationship with An Post and, at the same time, is also launching a new mobile bank service to provide certain banking services to customers in remote locations. The mobile service will allow customers to make lodgements and withdrawals, to pay bills and to order foreign exchange.
At the moment, AIB banking services are available in over 1,100 An Post outlets nationwide. The current services at any An Post outlet allow AIB customers to make cash lodgments for personal and business customers, avail of cash withdrawals up to €600 per day, pay their credit cards bills and use any of An Post's own branded services, including bill payments, postal drafts and foreign currency. In addition, AIB plans to build on this successful relationship with An Post and has arranged for additional banking facilities to be available in over 90 selected outlets. AIB and An Post management are working closely together at local, regional and national level to ensure the successful launch of this enhanced service and An Post staff will be fully trained to offer this new service in advance of the branch closure dates. As part of the closure process, the bank is also engaging extensively with customers, businesses and community groups in affected areas to ensure there is an adequate understanding about the rationalisation process and is endeavouring to keep all stakeholders fully informed to minimise any inconvenience. Clearly, it is not succeeding in that regard if what the Senator is telling me is the case, despite the paragraph I have just read to the House.
In respect of Portarlington, I am informed that customers of AIB are co-operating with An Post to ensure the provision of enhanced banking services at post offices in Monasterevin, Rathangan and Kildare. Furthermore, following the closure programme, there will be AIB branches within about 11 miles of Portarlington. On the issue of security, I understand that AIB have a dedicated SME cash management team available to meet with business customers and discuss their cash management requirements and the alternative services available including merchant terminals, CIT services and night safes.
I readily concede that it is not perfect but there is an inevitability surrounding the Government's decision to support the new pillar bank structure. Following our election to Government in March 2011, we said we would radically restructure the banks. An inevitable outcome of this requires that the banks become smaller, leaner and meaner in the sense of their operation and that they cut down radically on their cost basis. I am reliably informed that only one in ten transactions are now completed by customers in branches so the great majority of people are moving to online services. That is another inevitable development of the commercial banking system. It seems that despite the decision take in July 2012, AIB management clearly has a lot of work to do in persuading customers in these locations that the service that will be left either through An Post or elsewhere will meet the standard that is there.
As I said in my initial reply to the Senator, and I am sure he appreciates this, we are prohibited as a Government from directly intervening in the day-to-day management of the bank. It is strictly prohibited despite the fact that we on behalf of the people own the bank.
We cannot direct it to take steps in the manner that the Senator might suggest. Our task is to use persuasion in this House. If a better-configured service can emerge from these discussions, so be it. It is inevitable, however, that there will be branch closures when major restructuring exercises take place. I very much hope a much better job will be done by the bank in communicating this to its customers. There are customers who have been loyal for many years, and they did not get the banks into the trouble that required the State's bailout. The banks clearly need to up their game in that regard.
