Banks put profits before people

THE scandals in the Irish banking sector are damaging the sector's international reputation, Larry Broderick, director general of the Irish Bank Officials' Association, warned yesterday.

Mr Broderick said the ICI collapse, DIRT, Ansbacher, CMI, the Rusnak affair, overcharging and Faldor were finally taking their toll on the standing of the banking sector.

The IBOA, in its submission to the Joint Committee on Finance and the Public Service, said much of this had resulted from the downgrading of jobs, the introduction of low pay and the outsourcing of certain tasks, which had demoralised staff.

The end result was the series of scandals now hitting AIB in particular, but Mr Broderick told the Committee that the dramatic change in culture driven by profit is the primary motive that had done serious damage to our reputation.

Unless something was done about it the implications are serious for the national economy and for jobs in the banking sector, Mr Broderick said.

Accountability was a huge factor in the light of the scandals, and Mr Broderick said his union wanted to see workers appointed to the boards of the major Irish banks. Consumer representatives should also be brought on to the boards in an effort to bring the banks back to the ethos of being consumer and community centred operating units committed to the places where they are located.

Mr Broderick pulled no punches in the IBOA submission, saying the culture in Irish banking was driven by greed and profit. That principle has been fed by paying workers on the basis of performance, he said.

The IBOA noted that in 2000 the Department of Finance produced a report into the future of Irish banking from a wide variety of angles which it described as "thoughtful".

But it was remiss in its failure to address staff concerns over the growing obsession with increasing profits.

For its part, IBOA, which represents over 20,000 bank employees, believes a decline in ethics within banking is at the core of what is currently going on.

"This has resulted in a dominant culture emanating from the top down of profit before everything", said the IBOA.

"Profit comes before service and the customer, before ethics and the highest standards, and profit comes before the welfare of staff," the submission added.

Mr Broderick said that the profitability of the banking sector and its financial soundness were not an issue.

IBOA's concern as the major union representing the workers in the sector was the massive shift in culture that has been in evidence for some time.

Committee member Richard Bruton of Fine Gael said he was quite shocked and openly critical of all of the revelations concerning AIB in particular.

"What's emerged signals serious problems that have to be addressed", he said.