Monday, December 13, 2010

The first sensible thing an Irish bank has done in three years

No doubt most people, like me, were flabbergasted when they heard that AIB Bank was to pay €40 million in bonuses to some staff - money that would have to be funded by taxpayers. The bonuses worked out at €17,000 per employee that had "earned" the bonus during AIB's descent into the financial quagmire of their own making. AIB shamefully hid behind "legal advice" in claiming that they were obliged to pay, while a jaded Minister for Finance could only muster a threat to tax future bonuses at 90%.

Photo from
First - I admire the balls of the staff who took AIB to court to get their bonus money. Perhaps their division made a profit, but they risked public ire by their actions. AIB ignored the public's outrage by agreeing to pay the money - bankers paying bankers, how sad it is to see AIB get this so wrong by not putting up a fight.

Well guess what - a U-Turn, they are not going to pay! In a news item in the Irish Independent this evening there is a PA report that AIB in U-turn over 40m euro bonusesThe U-turn was announced after Finance Minister Brian Lenihan intervened and wrote to the bank's board overturning its legal advice. More "legal advice"!

To their credit, AIB have seemed to have been a bit embarrassed with this bonus story, but I didn't believe they would do anything about it (on "legal advice") - bankers paying bankers again. The Independent report cites a spokesperson as saying "We are determined to position the bank to play a full role in the recovery and development of the Irish economy. In doing so, we are committed to treating our customers, staff, the taxpayer and the public in a fair and transparent manner."

Good for Brian Lenihan - his "legal advice" was stronger than AIB's, and they have blinked first. Next step - see if the staff have the balls for a further lawsuit, I bet they are seeking "legal advice" already. Have a go in the courts if you are tough enough!

Some sense in Irish banking at last.

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