My favourite footballers, Manchester United, lost 7-0 to Liverpool. Evictions were on the way back. Russia was winning the war in Ukraine. Homelessness was set to rise. Mortgage rates were rocketing. Global giant Meta was laying off more staff in Ireland. Even the weather turned nasty.
t promised to be a terrible week, until suddenly up popped a cheerful, chirpy plutocrat. All was well. Colin Hunt, chief executive of AIB was in fighting form. The bank was back in business. Rejoice.
On the day after the return of evictions was announced, Hunt decided to hit the airwaves with “knockout” results from AIB.
He wisely never whispered the really glad tidings that the road was being cleared for landlords and bankers to repossess properties from destitute borrowers.
The ban was gone, only a few short months after the bankers’ salary cap had been lifted. Happy Days.
Hunt triumphantly told bewildered Irish audiences about the bank’s successes. AIB’s 2022 profits had soared to €765m, he boasted.
He had secured another 450,000 customers due to the exit of Ulster and KBC. New lending was up 22pc, he bragged, sharing other chilling “good news” that must have numbed the nation.
He even had the brass neck to gloat about shareholders receiving €381m in dividends. That will really excite the jobless, the homeless and those with AIB mortgages crucified by rising interest rates. Not to mention the bank’s cash-starved savers.
Dividends go to a bank’s shareholders. The biggest beneficiary will be the State, because AIB is 57pc state- owned. AIB’s better results are due less to any skill on Hunt’s part, than to a steady rise in global interest rates.
Up go interest rates, profits will follow. Up go repossessions. Up go bankers’ salaries and benefits.
Higher interest rates and larger mortgage repayments are not the only cause of the Irish banks’ recovery. The forgotten losers are the little people, the savers, the depositors small and large, who have been exploited by AIB and Bank of Ireland for decades.
Today, as AIB draws blood out of its borrowers, it refuses to reward its savers. At a time when inflation is running at 8pc its depositors are receiving close to zero.
AIB has enthusiastically passed on the rise in European Central Bank rates by extracting higher repayments from those with mortgages, but its trapped savers have been told to go and stew.
If they wish to shop around, they can always turn to rival Bank of Ireland, who are playing the identical “nil return” game with savers. The battered masses have Hobson’s choice: if they, prisoners of AIB, switch to the Bank of Ireland, their ordeal will be akin to a transfer from Mountjoy Jail to Arbour Hill Prison.
To be fair to Permanent TSB it is making plucky efforts to seduce small savers offering modest, but still miserly, returns of less than 1pc for some deposits.
Three weeks ago, AIB raised its mortgage rates by an average 0.5pc. Simultaneously it delivered an insult to depositors, increasing demand deposit rates from 0pc to 0.1pc, a token gesture. If you deposit €1,000 you will receive one euro a year in interest.
Comparisons with other European countries suggest while Irish banks are paying an average of 0.7pc to savers, EU banks offer over double that. Not surprising, as Irish governments tolerate a banking duopoly with an uncanny, but disturbing, similarity in pitiful deposit rates for small savers.
Of course, Hunt will hardly be troubled by such trivia because he earns ten grand a week in salary and trousers two grand a week into his bloated pension pot.
AIB has never jettisoned the culture of contempt for its customers. Last July, Hunt decided to abolish cash in 70 of its 170 branches.
It was an insensitive, out-of-touch decision for a state-owned bank located in every town and many villages in Ireland. Human beings were becoming a nuisance. Little people were intolerable. Arrogance was back.
AIB’s cash customers rose up in their thousands. Hunt was forced into a U-turn. He had gone too far.
Nevertheless, today the ugly AIB ethos sees every citizen as either a profit centre or a disposable loser. Dividends are for delivery to powerful shareholders. Savers are a pain with nowhere else to turn. Ignore their claims. Fleece them.
The banking scene mirrors the plight of last week’s energy companies’ victims, where small customers of Electric Ireland are marginalised. In both cases the Government is colluding with a state-controlled company headed by overpaid tycoons, to impoverish the vulnerable customer and favour elite stakeholders. Little people come last.
Bankers and semi-state bosses have always protested in unison against such accusations of favouritism. So, it was awkward for AIB when its outrageous settlement with celebrity client DJ Carey surfaced in the media.
Last Wednesday, when Joe Lynam on Newstalk Breakfast asked Hunt if the star hurler had been awarded a special favour from the writedown of €7.7m for his property speculation, the AIB boss replied indignantly that everyone “received the same fair treatment”.
Hunt had shrewdly declined an invitation to the Oireachtas Finance committee a week earlier to answer questions on the topic. Instead, he dispatched a few underlings to take the flak.
The common approach from AIB and Bank of Ireland — to abuse their vulnerable customers — is contagious. Even the instinct at the Department of Finance is to support them. The bonds between banks, politicians, semi-state bosses and mandarins are alarmingly tight.
We should not forget that Colin Hunt himself was a special adviser to Brian Cowen when the latter was finance minister. Cowen is a decent man, but Hunt is unlikely to put his position as Cowen’s special adviser at the top of his promotional material when he sets out his stall on his roadshow this week.
Remember in 2007, Cowen told the Dáil that “Ireland’s banking system is well-capitalised, profitable, liquid and soundly regulated”. Within less than a year it had collapsed.
By that time, Hunt had dodged a bullet and departed for the far less risky haven of the Australian bank Macquarie. He rarely reminds anyone of his time in Cowen’s boom-time inner circle.
Yet Hunt’s survival is a reminder of an ongoing disease in Ireland’s upper echelons.
A banking duopoly, state monopolies — like the DAA and An Post — faceless energy companies, all members of big business lobbyists Ibec (of which Hunt is a director) and a dominating civil service, have regrouped. They are leaving small savers abandoned, debtors evicted, overcharged energy customers devastated and consumers voiceless.
The State is indulging its affluent allies while they bleed ordinary citizens dry. We are moving closer to being controlled by an oligarchy than by a parliament. The return of evictions and the triumphalism at AIB confirmed the supremacy of the unelected elite.
Welcome to Albania.
