'Radical change' on the cards as AIB review is finalised
AIB has completed its long-awaited strategic review and drawn up a plan for "radical change of a magnitude never before undertaken", executive chairman David Hodgkinson told staff yesterday.
The Irish Independent understands the plan includes carving AIB's main operations into a 'core' bank and creating an internal 'non-core' bank to hold 'non-core' assets until they can be sold.
The plan, which has been submitted to the National Treasury Management Agency (NTMA) and new Finance Minister Michael Noonan, also includes details of job cuts.
A spokeswoman for AIB declined to comment on the details of the plan last night, as did a spokesman for the NTMA. Mr Noonan's spokesman could not be contacted last night.
A spokesman for staff trade union the Irish Bank Officials' Association (IBOA) said his representatives had been given "absolutely no" indication of the scale of job losses and were not familiar with the plan.
"In discussions with us they did not indication that a plan had come to fruition at all," he said. "It (Mr Hodgkinson's statement) surprised us and disappointed us."
The Briton embarked on the strategic review soon after he took office last November. In an email to all staff sent yesterday, he confirmed the review had now been submitted to the bank's board.
"It determines our future size, our future composition and our future leadership structure," he said. "It addresses staff reduction and redeployment and how we are going to deal with remaining legacy issues."
The note confirmed that the bank's "preferred approach" was to secure "most" of the redundancies on a voluntary basis.
Mr Hodgkinson stressed that the plans must first be "discussed with the relevant authorities and the appropriate members of government" as well as staff representatives before more detailed guidance could be made.
"I hope I will not have to keep you waiting very much longer," he said, acknowledging that staff have "been through a period of uncertainty" and are "very anxious for clarity".
Changes for the bank's most senior staff will be "more immediate". The bank has completed its review of top managers and is "now selecting the top team".
AIB has been involved in mediation efforts with the IBOA over the broad parameters of the review, and the subsequent plan to restructure the bank.
The IBOA last night said it was "surprised" AIB had submitted a restructuring plan before completing the review.
A spokeswoman for the bank stressed that the plan was "preliminary" and that additional consultation with the trade union would take place.
A final outcome on the plan is not expected until after the bank has received the results of the Central Bank's latest stress tests, which will be published at the end of March.