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BoI sorry after secret bonus payouts revealed

THE Bank of Ireland is under investigation over claims of a series of performance-related bonuses last year -- after a promise that staff would not cash in.

A probe by the Department of Finance has discovered that the bank paid "contractual bonuses" which included "a performance element".

The bank's CEO has apologised "unreservedly" to Finance Minister Brian Lenihan after initially telling him that no such payments were being made.

At the beginning of December, Mr Lenihan told the Dail that the bailed-out bank was not paying bonuses -- but today admitted that he was wrong.

Officials from the Department of Finance are now spending "a substantial amount of time" investigating how many bonuses have been paid and what amounts are involved.

In reply to questions from Labour's Joan Burton, Mr Lenihan admitted that "information given to my department by Bank of Ireland to the effect that no performance-related bonuses were paid to staff was incorrect".


He explained that this did not take account of "contractual bonuses" which probing by his department revealed did have "a performance element".

"This failure by the bank led to erroneous information being placed on the Dail record on December 1, 2010," said Mr Lenihan. The minister said that he had received a letter from Bank of Ireland CEO Richie Boucher in which he acknowledged "the difficulties caused as a result of this misinformation and apologising unreservedly for it".

"I have been undertaking, as a matter of urgency, an intensive investigation of the additional payments made by Bank of Ireland since the introduction of the guarantee scheme and of additional payments which it may have intended making in the future."

He told Ms Burton that it would take some time to establish all the facts because his officials needed to verify any information from the bank.

"On completion of this investigation I will make available to the deputy, and the house, whatever additional information comes to light," he said.

Last month Mr Lenihan was forced to introduce a 90pc tax on banker bonuses paid by institutions covered by the State guarantee.

He also stepped in to block the payment of €40m worth of bonuses at AIB, despite initially claiming he did not have the power to do so. It subsequently emerged that at least one bonus was paid to a senior Bank of Ireland executive with the amount reported as €500,000.

The revelation that further bonuses may also have been paid at the bank is likely to spark a new controversy.

" I do not accept that substantial sums ought to be paid in bonuses to senior staff of banks dependent on State support," said the minister.

"In particular I may impose conditions regarding the payment or non-payment of performance bonuses. I have already made clear in the AIB case that I will impose such conditions and I can assure the deputy I intend to adopt a similar approach to the provision of support to Bank of Ireland."