Denis O'Donovan (Fianna Fail)
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I thank the Minister of State for taking the motion, which refers to a relevant and prevalent issue concerning the Mizen peninsula. Our former, long-established colleague, P.J. Sheehan, was in these Houses for almost 30 years, representing Goleen and the Mizen peninsula. If he were still in the other House, there is no doubt that this branch in Schull or Ballydehob would not be closed, but sin scéal eile. The peninsula is very remote. Normally, it has a population of approximately 5,500 souls. As a result of tourism in the summer, particularly because of the sailing centre in Schull, it swells to probably double that figure.

To add salt to the wounds, not only has AIB decreed that the branch in Schull is to close, but the branch in the neighbouring village of Ballydehob is to close as well. Some people living in remote parts of the Mizen must travel by car for one hour to get to the nearest town of Skibbereen, where AIB proposes to relocate its business.

This is very unfair.

It is also worth noting that a survey on the demographics of the Mizen Peninsula undertaken by the HSE shows that the region has one of the highest number of people aged over 60. This decision will damage the status of the peninsula and of Schull in particular, which is a tourist hub and is famous for its fishing, its connection with Cape Clear and the Fastnet lighthouse, and its successful sailing college. This decision is a kick and blow to the small businesses in that area, the shops and restaurants, the pubs and those involved in farming. At a recent meeting in Schull, about 500 people from all parts of the peninsula begged AIB to keep its Schull branch open. I know these are difficult times but the proposal by AIB to provide a mobile banking service is a very weak alternative and a poor substitute. In my view, the provision of a mobile banking service is a security risk. A cost-benefit analysis on the retention of the Schull branch as opposed to the cost of security and staff for a mobile unit would show there is not a lot to say. In these circumstances I can see that it was probably commercially correct that the Ballydehob branch should go - although not everyone would agree with me - because it was only just ticking over. However, I plead with the Minister of State to consider putting as much pressure as possible on AIB to have Schull retained for five days a week, at least in the summer months when it is a very busy branch, and this could be reduced to three days in the winter months. Dublin and other major urban centres have buses, Luas, DART and a good taxi service, but many people in the Mizen have none of these transport options. The younger generation know all about online banking but many people over 55 - this is probably the case throughout the country and not just in west Cork - are not in a position to avail of online banking. The Mizen peninsula is a remote rural area without any banking facilities. I is almost 40 miles in length and to leave it without banking facilities is an awful blow to the communities who live there, especially the people in farming, fishing, tourism, small businesses, pubs and restaurants. I am pleading with the Minister of State to reconsider the position and at least to ask the bank to look at Schull in particular where the branch service could be retained full-time during the summer months and three days a week in the winter. We have lost two Garda stations and at a recent meeting of the group which monitors crime in the peninsula, it was noted there had been an increase of break-ins and crime in the peninsula, which in the view of the community is as a result of the loss of the Garda services. The loss of the banking service will entice people to keep money at home and will put out a welcome sign to the criminal gangs of Cork and beyond who would love to come and harass old people and take their life savings.

Brian Hayes (Dublin South West, Fine Gael)
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I thank Senator O'Donovan, the Leas-Chathaoirleach, for raising this matter. As the Senator will be aware, and notwithstanding the fact the State is the significant shareholder in AIB, the Government must ensure the bank is run on a commercial, cost-effective and independent basis so as to maintain the value of the bank as an asset to the State, as per the memorandum on economic and financial policies agreed with the European Commission, the ECB and the IMF. A relationship framework has been specified which defines the nature of the relationship between the Minister for Finance and the bank. 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 and the Senator will appreciate, it is an inevitable, but unfortunate consequence of the necessary restructuring of the banking system and the return to viability of the sector that branches in certain towns and villages will be closed. The Government appreciates that branch closures will have an impact on those towns and villages, but the Department has been informed by AIB that the bank is working very closely with its customers to ensure the disruption is minimised and to provide a range of alternative banking options to affected customers, such as use of local post offices and mobile banking facilities.

As part of AIB's restructuring plan to return the bank to profitability and to 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. In total, 67 locations will be impacted, equating to 27% of AIB's branch network. It is worth noting that AIB will still have 200 branches in Ireland following the 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 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, pay bills and order foreign exchange. At the moment, AIB banking services are available in more than 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 more than 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. It is endeavouring to keep all stakeholders fully informed to minimise any inconvenience.

Specifically in rural areas in Cork such as Mizen Head, I am informed that customers will be able to access enhanced banking services at post offices in Ballydehob and Schull, while AIB is also exploring the possibility with An Post of offering additional services in Goleen. I am sure the former Deputy will be delighted to hear that. The mobile bank service will also be available in both Ballydehob and Schull three days a week, on Monday, Thursday and Friday. There will still be 30 AIB branches remaining open in Cork, with some within ten and 15 miles of Ballydehob and Schull, respectively.

Senator O'Donovan has made a very valid contribution and he is to be commended on putting forward the case for his own area..The fact that he has raised the matter in this public forum as a Member of the Oireachtas requires AIB to reply specifically to him and, in my view, this is what it should do in respect of the information the Senator has put on the record of the House. The argument about Schull has been well made by Senator O'Donovan and I think AIB has a responsibility to reply to him on that case.

Denis O'Donovan (Fianna Fail)
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I thank the Minister of State for his very frank and fair reply, as usual. It would be unusual if he were to be in any way discourteous to me. However, it is cold comfort. I accept the Minister of State is between a rock and a hard place.

AIB has an obligation to ensure its business is commercially viable. Nevertheless, the decision, taken without prior consultation with customers, to discontinue services to these communities was a terrible blow. An indication was given to local public representatives, including me, some 12 months ago that the Ballydehob branch, because it was open for only a small number of hours per week, was not viable. The closure of the Schull branch, however, was a hammer blow. Schull is some 16 miles from Skibbereen, which means that entire end of the peninsula is without banking services. While the young whippersnappers will probably be able to do their banking online, others, including the elderly, will be very discommoded. It will also have a negative impact on businesses which handle large volumes of cash, such as restaurants, pubs and so on. Such premises will be a honey pot for criminals because it will be known that cash is being deposited in banks less often.

The bottom line is that AIB owes a duty of service to the people of this remote community. There has been no engagement, however, and it refused to send a representative to the recent public meeting. People in Schull have given the bank their custom for many years. While I accept that the Ballydehob branch does not have a future, I urge the Minister of State to convey to the management of the bank the urgent need to reconsider its decision regarding Schull.

Brian Hayes (Dublin South West, Fine Gael)
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I very much agree with the point the Senator is making. It is not acceptable for banks to refuse to send representatives to a public meeting in circumstances where a local banking service is potentially being withdrawn. Given the long-standing relationships that exist in this community and the customer base the bank has built up, the failure to engage is particularly disappointing. If it is right and proper that politicians should attend public meetings to account for themselves, it is equally right and proper for bank management to do the same. Such engagement would, if nothing else, allow management to explain its position.

As I said in my reply, branch closures are an inevitable consequence of the bank restructuring programme which the Government has initiated. Nine out of ten transactions are now conducted online, with in-branch business accounting for only 10% of transactions. That is the direction in which banking is moving at a global level. Nevertheless, banks have an obligation to engage with local communities and to make their case, rather than running away and asking politicians to do their job for them. The Senator will appreciate, however, that my Department cannot involve itself directly in this or any other individual case. All such matters must be commercial decisions for the banks themselves. We are precluded from intervention in these cases, as is right and proper. The banks must focus on returning their business to profitability so that, ultimately, the State can get back the money we have had to pump into these entities in recent years. While management must do what it considers necessary to achieve that end, part of that must include an engagement with the loyal customers who had no part in the decisions which bankrupted the banks. The people in the area to which the Senator referred are entitled to an explanation and he is absolutely right to point that out.