Bank of Ireland is taking another step back from the UK market, announcing plans to wind down its £2 billion corporate lending business in Britain.

This latest retreat is aimed at generating long-term sustainable returns for the bank, it said.

Ireland's largest bank has been steadily reducing its presence in the UK lending market over the past few years. Since 2017, Bank of Ireland has cut its lending assets in Britain by approximately 25 per cent.

In December 2022, the bank ended its partnership with UK motoring services group The AA and scaled back products offered via the UK Post Office network.

In a statement on Wednesday, Bank of Ireland defended these strategic moves, stating, "By being more purposeful and strategic about what we offer in the UK, we have transformed the performance of our businesses in recent years." The bank highlighted a 57 per cent increase in underlying profitability from its UK operations since 2019.

The winding down of the £2 billion corporate lending portfolio will impact around 40 employees based in London and Manchester. Bank of Ireland said it will offer these staff options such as voluntary redundancy or potential redeployment within the organisation.

The bank estimates the wind-down process could take up to 36 months to complete. It clarified that this move excludes its commercial real estate, acquisition finance, and Northern Irish operations.

Analysts at Davy Stockbrokers expect the winding down of the £2 billion portfolio, which accounts for around 2.5 per cent of the bank's total loan book, to have a negligible impact on earnings forecasts. However, they anticipate it will positively benefit Bank of Ireland's return on tangible equity (ROTE).

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