One of the options available to Irish Nationwide in its EU state-aid restructuring plan is simply a complete wind-down of the society. Despite the inevitable human cost, is this the preferential choice?

At yesterday’s AGM, society member Brendan Burgess launched a scathing attack against Irish Nationwide, saying that it was just a “€2.4bn loan book” and that it has no future, and no role in society.

Obviously, chairman Danny Kitchen was keen to defend the firm, saying that without Irish Nationwide in the market, the bigger players would be restricted.

Proportionately speaking, Irish Nationwide’s is the worst in a dire bunch of domestic banks. All of its €10bn commercial loan book will eventually transfer across to NAMA and the first tranche was taken at a 58% discount – the largest highest of any institution.

After reporting a record €2.5bn loss for 2009, it received €2.7bn in state aid and Kitchen admitted yesterday that if future losses exceed a certain level it would need additional capital.

He also told the Irish Independent on the sidelines that one of the EU restructuring options – a merger with fellow building society EBS – is unlikely to get the thumbs up. This leaves either a gradual wind-down, or the prospect Irish Nationwide surviving on its own.

Assuming it manages to stem the losses, future commercial lending is out of the question, and Irish Nationwide is likely to return to its traditional roles as a savings and loans institution.

Despite the current predicament, Irish Nationwide has been recruiting, and staff numbers stood at 399 at the end of 2009, compared to 385 in 2008.

It’s getting away with paying less, however, having set aside €15.9m for staff costs – or an average of €40k per head – compared to €18.5m in 2008, or €48k per employee in 2008.

Recruiters tell us that, not surprisingly, Irish Nationwide is already having extreme difficulty attracting people to its current vacancies.

Obviously, the last thing Ireland’s financial sector wants to see is yet more redundancies, but in the long-run it could be the best option.