Directors: BoI chief ‘right man for job’

Bank of Ireland chief executive Richie Boucher is the right man for the job, according to its public interest directors, Joe Walsh and Tom Considine.

Appearing before the Oireachtas Finance Committee, the pair said there had been an extensive search for the right candidate with the board of directors coming to the unanimous decision to appoint Mr Boucher.

Fine Gael TD Kieran O’Donnell had criticised both public interest directors for rubberstamping the appointment of Mr Boucher as he had been a senior executive with the bank in the years leading up to the crisis. Moreover, Mr Boucher had been responsible for introducing 100% mortgages, said the Limerick TD.

Mr Walsh said the performance of Bank of Ireland since 2009 vindicated the appointment of Mr Boucher.

Mr Walsh has been paid €327,000 in fees since 2009. Mr Considine has been paid €356,650 over the same period.

Neither director had met the minister for finance since their appointment, which prompted much criticism from members of the Finance Committee.

Former secretary general of the Department of Finance, Mr Considine said only about 20,000 of the 500,000 Bank of Ireland credit card holders would be affected by the 4% increase in the interest rate. About half of all credit card holders paid their bills every month and did not pay any interest.

Mr Walsh said the Government’s guarantee of deposits cost the bank €415m last year, which was weighing on its efforts to return to profitability and it intended to exit the scheme as soon as possible.

Sinn Féin TD Pearse Doherty criticised Mr Walsh for not preventing the payment of €66m in bonuses to Bank of Ireland staff between 2008-2010.

AIB public interest director, Dick Spring said he had tried to stop the payment of €60m in bonuses over the same two years, but the bank was contractually obliged to pay out on foot of a legal challenge.

Moreover, the former tánaiste said a significant number of former AIB executives had surrendered some of their pensions following written requests from the bank, although he was legally prohibited from giving precise details.

AIB public interest director Dr Michael Somers said that his bank would work within the personal insolvency legislation when it is introduced. If, at the end of the three-year work-out period proposed in the legislation, there were no funds to discharge the remaining debt, “then so be it.”

But he ruled out blanket debt forgiveness on the basis “that it would be spending other people’s money.” He argued that AIB would need another capital injection if that were to happen which would come out of the National Pension Reserve Fund. “Somebody’s pension,” he added.

Dr Somers doubted that the ESM would pay the Government €20bn for its stake in AIB because the European fund was not mandated and didn’t have the equity to incur losses.