By Eamon Quinn
The new chief at Bank of Ireland has pledged the bank will do a lot better as the bank’s directors faced a barrage of criticism from shareholders over its care of customers, the alleged lack of staff at its branches, and mistakes such as cheques being cashed with the wrong amounts.
Francesca McDonagh, who stepped into the job from HSBC in Britain last October, faced her first outing in front of Bank of Ireland shareholders as at the same time Archie Kane, the €490,000-a-year chairman, prepared to step down to be replaced by Patrick Kennedy, best known as the former Paddy Power boss.
Shareholders also touched on the tracker mortgage overcharging, with Ms McDonagh saying the bank had so far spent €130m on compensating customers. That means a large chunk of the €170m it has set aside has been eaten up, as it prepares to deal with its own staff who will likely be compensated too following the work of financial consultant Padraic Kissane in uncovering the industry-wide scandal. But a number of shareholders from the floor, including retired staff, cited instances of poor customer care, with one shareholder claiming Bank of Ireland branches to be “the least friendly” in the country.
Ms McDonagh said the transformation plan she was driving would help staff deal with customers better. To remain as Ireland’s largest lender it would have to up its game, she said. Outgoing chairman Mr Kane said the bank needs “to improve” and has “work to do”. He pledged its investment in new technology will in time pay off as it struggled like other lenders with “legacy issues”.
Mr Kane said the bank carried the lowest level of non-performing loans in the industry and had posted its first growth in net lending for the first time since the crash. On Brexit, Mr Kane said it had hit consumers in the UK and delayed investment decisions in both Britain and Ireland. Bank of Ireland has a large lending operation through the UK Post Office.
A vote to restore an incentive plan, on which the Government abstained, was carried by 99% of those voting. Owen Callan, a leading analyst at Investec, said institutional shareholders will focus on the bank’s capital day in June. Bank of Ireland shares fell 1%, leaving the shares up 1% from a year ago.
By Eamon Quinn
“A Bank of Ireland branch is a very cold place” and just as Michael O’Leary belatedly learned the value to his no-frills airline of treating customers well, the bank would have to learn quickly too, said a disgruntled shareholder from the floor of its AGM.
His was just one voice of criticism, including those of retired staff, that greeted new CEO Francesca McDonagh at her first AGM since joining the bank last October. Her big agenda of change is mostly aimed at meeting the demands of institutional shareholders, to get costs down and an underperforming share price up.
But at the UCD gathering, shareholders gave startling first-hand insights into Irish banking.
A shareholder told of an elderly customer forced to sit on the floor as the branch had no chairs. People just want to be treated properly, another said, pleading with directors: “Please please, listen to customers” and not just to yourselves. Ms McDonagh must grapple with the Brexit hit to consumers in the UK, where the bank has a sizeable operation. Yesterday, she saw problems closer to home.