Irish Internet Bank Shuts Its Doors

by Jason Gorringe, Tax-News.com, London

07 September 2001

Dublin-based on-line bank First-e is to be closed, with the loss of 245 jobs, it was announced last night. 35 staff will remain at Factor-e, the bank's technology development unit which hopes to sell its software products to other banks and brokerages.

First-e was operated by Enba, an Irish internet incubator whose backers included Banque d'Escompte, investment bank Morgan Stanley, Intel and CGNU, the UK insurer. First-e operated using the French banking license of Banque d`Escompte under the EU 'single passport' system which allowed it to attract customers from all over the EU. Banque d'Escompte will be closing its Internet operations in Britain and Germany at the beginning of October, and will concentrate on its core French market.

First-e has about 80,000 customers, mostly in the UK and Germany. The German business is being transferred to German bank DAB AG (Direkt-Anlage Bank), who will pay a fee to Enba for each customer who transfers, while UK customers will be offered the opportunity to transfer their funds to SelfTrade, DAB's UK online broker. DAB is part owned by German financial giant Hypo Vereinsbank.

Enba itself had been under pressure to sell after laying off 120 of its 400 staff since the beginning of the year, and had been seeking a buyer since the collapse last April of an attempted $2.1bn merger of First-e with Uno-e, the internet banking arm of Banco Bilbao Vizcaya Argentaria, Spain's second-largest bank. DAB - Europe's third biggest internet stockbroker - is also rumoured to be preparing to buy loss-making French company Fimatex, owned by Societe Generale.

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