The Bank of Ireland board faced a barrage of queries and complaints from shareholders on the future of its UK lending operations, customer service and new technology, ATM thefts, dividend payment plans, and lagging shares of Irish banks.
A number of retired Bank of Ireland employees told the annual shareholders' meeting they detected little progress and were not satisfied by the bank’s service at branches, saying there was still not enough staff even as Bank of Ireland continues to invest and revamps outlets across the country.
In the first AGM under new chairman Patrick Kennedy, shareholders heard from top executives, including chief executive Francesca McDonagh and chief financial officer Andrew Keating, that the bank is working hard on employing more than 200 staff on “frontline” branch services.
The lender is committed to reaching its target of paying out 50% of distributable profits to shareholders, the AGM was told.
Ms McDonagh, at her second annual meeting since taking the top job in late 2017, said customer complaints had fallen and its commitment to customers is genuine. The bank had not closed branches and its “footprint” is the largest of the banks across the island, she said.
Answering a complaint from the floor that the dividend payout was too low — “it would be an understatement to say that the share price was a disaster” — Mr Kennedy said the shares of Irish banks had been “volatile” in recent times, held back by Brexit, the possibility of trade wars, and by expectations that the ECB would keep interest rates lower for longer. But it is on “the right strategy” to boost its value, he said.
Shareholders also questioned the bank’s “transformation strategy”, saying lending growth lagged the pace of the economy and questioned the performance of its UK operation where it has a major lending facility with the UK Post Office. Its aim is to be the “champion bank” in Ireland and improve its performance in the UK, said Mr Kennedy.
The board was also asked about the low number of shares they own.
Urging Mr Kennedy “to put your hand in your pocket”, one shareholder said that as a small holder, he nonetheless holds more Bank of Ireland shares than six members of the board between them.
Mr Kennedy said the lender is delivering against a multi-year plan by cutting costs and reducing non-performing loans as it aims to increase its dividend over time.
That strategy “was aligned” to the interests of customers and shareholders, he said.
Referring to the spate of ATM thefts on both sides of the border, Ms McDonagh said that Bank of Ireland had worked hard to provide services following the thefts and that security measures had been initiated.
Its UK lending operations help it reduce its exposure to Ireland, and it is already moving to boost profitability in Britain through its previously announced plan to sell its UK credit card business and ending issuing current accounts in its venture with the UK Post Office.
A shareholder was told the lender could not shelter all its earnings despite holding large tax losses from the crisis years.
And the bank said it has no plan to follow AIB in stopping issuing its own sterling bank notes in the North.