Lloyds Banking Group is set to pull Bank of Scotland Ireland (BoSI)out of the country and cease all lending there by the end of the year.
BoSI had been trading under the Halifax brand in Ireland but will stop operating as a licensed bank on 31 December.
Its business will be transferred to Bank of Scotland after a strategic review revealed little opportunity for growth, in the wake of havoc caused by the property crash in Ireland.
The decision follows Lloyds' announcement earlier this year that it plans to close down the retail and intermediary BoSI business. It also follows the bank's admission last month that as much as 90% of its €13.3bn commercial property book in Ireland was impaired.
BoS will take charge of the run-down of the current lending portfolio and Lloyds said current BoSI lending customers will see "no change."
All loans will be transferred to BoS with the same repayment arrangements in place until maturity or account settlement.
Lloyds said it will work with depositors at BoSI to ensure a smooth transition of their banking arrangements.
BoSI will also cease to provide working capital and wealth management services by the end of the year.
Lloyds says: "Customers will be contacted in the coming weeks to advise them how these changes would affect them."
The group plans to employ an independent service company to oversee administration for the BoSI banking business, subject to approval.
Lloyds said it is looking to transfer the majority of BoSI employees and it is "committed to working through these proposed changes with employees carefully and sensitively." Over 800 employees were briefed by management this morning and the union Unite has also been involved in discussions with the bank.
The group's other business operations in Ireland and Northern Ireland - including its Halifax branch network, customer service centre in Northern Ireland and its insurance operation in Shannon - are unaffected by this announcement.
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