independent

Thursday 17 April 2014

Change culture of banker perks now

LAST year, our biggest bank, AIB, 93pc owned by the Irish State, lost a record €10.4bn. This year, the bank has bought 79 new cars for its employees. Of these, only 52 have gone to persons who need them in the course of their work; the remainder are perks written into the contracts of senior staff.

The Bank of Ireland (36pc state-owned) conducts its affairs on somewhat more modest lines. Last year, it lost a mere €960m, and this year it leased only 59 new cars for staff members. AIB has a total of 536 company cars; Bank of Ireland, 340.

Nearly three years after the blanket bank guarantee -- and with the country still floundering in the crisis to which these institutions have contributed so heavily -- figures of this kind would make any finance minister raise his eyebrows. The lavish perk has come to the attention of the current minister, Michael Noonan.

Just how lavish a perk is it? The public does not know, and very likely Mr Noonan does not know. But more information would certainly be intriguing. Are we talking Mercedes, BMW or something more humble? And how long are these vehicles expected to last? One hears owners on modest incomes boasting that 1200cc bargains have served them admirably for 250,000 miles.

But the banks are shy about disclosing such details. AIB's annual report hides the cars under the title "annual taxable benefits". Bank of Ireland simply uses the term "other remuneration". It also tells us that "any cars due for replacement are being replaced by diesel models as this is more cost effective and better for the environment."

Concern for the environment is always laudable, but in other countries bank executives are often known to travel by bus or tram. This practice is more environmentally friendly -- and much cheaper.

The minister might well consider recommending it when he reviews the system. His spokesman says he "would expect that any institution, but especially those in receipt of such extensive state aid, would be mindful of ensuring that . . . operational costs are kept to the minimum commensurate with the needs of the business".

A good principle. But Fine Gael's Deputy Mary Mitchell O'Connor enunciates a better one.

She says that "the taxpayer really expects the culture to change within the banks."

We have waited for years for this change of culture, and it is high time that we saw some tangible signs of it.

Irish Independent

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