AIB should give €3.5m to Noble cause

AIB DID itself no favours yesterday in its response to the first round of the IFSRA investigation into its charging policies across its foreign exchange rates and other matters.

The financial regulator decreed the country’s biggest bank owed customers over €34m for overcharging on foreign exchange transactions and other matters.

But the bank has strongly denied it overcharged in the foreign exchange arena for a period of eight years.

It has nevertheless decided to repay the €26m-plus due on a technicality, according to the bank. That technicality was the failure to properly inform the Central Bank as to the actual amount it was charging customers on foreign exchange transactions.

Part of the bank’s difficulty is that it took a whistle-blower to lift the lid off the foreign exchange scam.

The other difficulty is that it had been known at a certain level in the bank and no one felt confident enough to draw the matter to the attention of those in the top level.

Does it actually say something in truth about the ethos throughout the bank?

Either those lower-down could not be bothered to raise the alarm or were too afraid to do so for fear of the backlash for their own careers. Either way, it suggests a serious problem in AIB.

To shore up its image yesterday, AIB wheeled in New York financial expert Eugene Ludwig to give it a bit more gravitas in the face of a hostile media.

Ludwig was the one who carried out the investigation into Allfirst.

It seemed back then that those at the higher levels in Allfirst had not exactly been confiding too much in the boys back home at that stage either.

One crucial phone call by AIB boss Michael Buckley to Allfirst when he raised the question of rumours of overtrading within the US bank were fobbed off.

Then the horror story of John Rusnak broke and Buckley was palpably angry that his call to one of his trusted servants in Allfirst failed to generate more of a response to his query.

Was it fear or was it the culture of the day which said we can get away with this if we tough it out? That question will never be answered, but it one that seems to keep cropping up about this bank and what deep down it stands for.

Ludwig at the time exonerated the top brass in AIB.

Now he is being drafted in again to reassure the investment community that all is well in AIB.

That remains to be seen. The Faldor disclosures involving tax evasion, facilitated from within the group, involving former top executives is probably the most damaging thing to hit the bank since Rusnak.

If the rest of the outside world is reading the signs correctly, this was premeditated and much more has to come out on that before the dust settles on what type of corporate culture resides within the corridors of power in AIB.

Something is clearly wrong within AIB. The book of evidence suggests this is so.

One other point of interest is the prospect that about €3.5 million of the money set aside for the overcharging scandals may never be traced back to those who were hit by the higher charges. That money ought to go to a real worthy charity like the Christina Noble’s Children Fund.

It might help correct the growing perception in this country that banking is about greed and rip-offs where those at the trough get paid way over the odds for doing incompetent work while defrauding the State and its citizens in the process.

Lest we forget, two former chief executives of the bank have been implicated in offshore tax evasion scams, suggesting that a culture of malpractice and contempt for corporate rules is rampant in the bank.