AIB chief and top managers to take double-digit pay cuts
AIB'S chief executive David Duffy and the bank's other senior managers are to take double-digit pay cuts as part of a wide-ranging cost-cutting plan, the Irish Independent has learned.
Sources also confirmed that the bailed-out bank was preparing to axe numerous branches across the country as it focused more heavily on online operations and actively recruited new senior executives.
The news comes as AIB prepares to unveil its 2011 results next Friday, when it's likely to report loan losses above the €6bn total it notched up in 2010 (though the latest figure will include EBS for the first time).
Mr Duffy took the helm in December and has spent his first three-and-a-half months sizing up its operations and laying the foundations for massive restructuring.
His first major move was to announce that the bank would be cutting some 2,500 jobs and not the 2,000 initially flagged. The bank yesterday detailed plans to introduce new current account charges.
The Irish Independent understands that further strategic announces are imminent. A double-digit pay cut recently agreed by AIB's most senior management could be announced next week.
On results day, the bank may also detail plans to overhaul AIB's branch network and increase the bank's focus on online operations.
The new branch strategy is likely to see AIB staff encouraged to spend less time in their offices and more time visiting customers.
Mr Duffy's other plans include significant change among the bank's most senior management team.
Results day will mark the new chief executive's first public outing, and he is likely be questioned extensively about the bank's severance package, its future losses and the amount it is lending, particularly to SMEs.
He will also be pushed for comment on AIB's attitude toward the new personal insolvency regime.
At last year's results, AIB's then-executive chairman David Hodgkinson became the first senior banker to give currency to the concept of "debt-forgiveness" as he told reporters it was "one of the possibilities" that would be "actively considered" by AIB.
Customers who hold the bank's 170,000 mortgage accounts will be particularly interested in whether AIB still holds similar views.