Watchdog's warning to blacklisted bankers

The 19 bankers blacklisted in last year’s report into National Irish Bank may never work in the industry again, a financial watchdog warned today.

Regulator IFSRA told an Oireachtas Committee that most of the senior executives cited for improper practices by High Court inspectors last July have left the industry and the remainder are having their positions assessed.

IFSRA chief Dr Liam O’Reilly said: “Our priority is to ensure that these people no longer work in the industry.

“These practices were utterly unacceptable and we are absolutely determined to ensure that there is no place for this type of activity.

“Institutions that put short-term profit ahead of customers will suffer financially and will suffer reputationally.”

The Joint Oireachtas Committee on Finance and the Public Service heard new legislation can fine banks up to €5m if found to be in breach of financial service regulations – but this came too late to penalise NIB.

The High Court report found NIB overcharged customers and encouraged them to dodge tax by by setting up bogus non-resident accounts.

Most committee members felt that NIB wasn’t being punished enough for the regulation breaches that occurred.

Committee member Senator Joe O’Toole said to IFSRA representatives: “However well you do your job, we feel as a committee that you’re not putting the boot in hard enough.”

Labour’s Joan Burton added: “The bank has got out of jail and is only giving back the customers the money they took illegally from them in the first place.”

Fine Gael’s Richard Bruton suggested that the €5m fine is just a day’s profit for most banks. “How realistic is a penalty of that nature?”

IFSRA outlined that NIB has now to pay out €12.5m to customers, of which €5.3m has already been paid out.

The bank has agreed to pay €1m to a nominated charity if it fails to identify some account holders.

All payments are to be made before the end of the year.

Dr O’Reilly said: “After some initial reluctance, it is clear that NIB have been working very hard to put things right, both in relation to how they deal with their customers and in terms of how they manage and run their business.”

NIB’s owners National Australia Bank sold it to the Denmark-based Danske Bank Group last month.