Friday 24 November 2017

AIB denies it is poised to pay €40m bonuses to staff

Emmet Oliver

AIB, the country's second largest bank, has denied it is about to pay out €40m in bonuses to its staff despite government opposition.

Labour Party finance spokeswoman Joan Burton yesterday claimed the bank was "committed" to paying out the money despite recent controversy over the payments. But AIB said in a statement that it wasn't making "any such payments".

More than 2,000 staff at AIB are entitled to bonus payments for work done in 2008, but to date the Government has blocked the payments, despite several staff pursuing legal action in the courts.

Ms Burton told the Dail her information was that the bank was going to pay between €30m and €40m next month, but AIB denied this yesterday.

In December, Finance Minister Brian Lenihan instructed the bank not to pay the bonuses after he said a "supervening" event had occurred. This event, he said, was the poor state of the bank's balance sheet and its need for cash from the Government.

Later yesterday Ms Burton said: "If AIB is now saying the bonuses definitely won't be paid, that's great. My information is that there are still legal claims outstanding."

Meanwhile, an investigation into bonus payments at Bank of Ireland is "ongoing", Mr Lenihan said. His department is involving "legal advisers", the National Treasury Management Agency and civil servants, Mr Lenihan said in a letter to Ms Burton, dated January 21.

"As regards the extent of the payments under investigation, we have been at pains to insist that all bonuses and bonus-type payments, both to senior executives and to other staff of the bank, must be fully disclosed,'' said Mr Lenihan.

Incorrect

"The verification of the relevant information necessarily takes a good deal of time. Substantial progress has been made already and I am confident that we can conclude the process reasonably quickly,'' he added.

After being disclosed by the Irish Independent in December, Bank of Ireland was asked to explain a large bonus paid to a senior executive in Bank of Ireland Asset Management.

The bank recently admitted providing incorrect information about bonuses and the Lenihan investigation involves getting a full picture of all bonuses paid by the bank.

All the main banks have been forced in recent years to pay retrospective bonuses to staff. These are bonuses for work carried out in previous years that only become payable after a certain time has elapsed.

The bonuses are now frowned upon in international banking.

Irish Independent

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