AIB reputation likely to suffer

AIB’S latest scandal may not cost the bank much in financial terms, but its reputation may be damaged for some time, a leading analyst said yesterday.

Stuart Draper, head of research at Dolmen Securities, said the bank will take a long time to recover its reputation in the minds of Irish and international investors following a month of revelation about overcharging of customers and now of possible tax evasion by former senior executives. AIB said on Thursday that it had uncovered evidence that five former senior executives were involved with an offshore company and using this to get “unacceptable dealing” practices with the bank’s fund arm, AIB Investment Managers (AIBIM).

The bank will have to make compensation payments to clients who were disadvantaged because of these deals and make an €800,000 tax settlement.