AIB chief: Ulster and KBC's departure is bad for banking

Colin Hunt said competition remains in other forms from fintechs and new entrants 

Colin Hunt, CEO of AIB, ruled out the suggestion that the acquisition of Goodbody was an attempt to circumvent pay restrictions on bankers.

The departure of Ulster Bank and KBC from the Irish banking market is bad for the industry, the head of AIB has said.

Colin Hunt was speaking at the Oireachtas Joint Committee on Finance just days after his bank agreed terms to acquire Ulster's €4.3bn commercial loan book.

The phased withdrawal of Ulster Bank and KBC has raised serious concerns about the level of competition for Irish consumers with pillar banks like AIB, Bank of Ireland and Permanent TSB dominating the market.

I personally regret Ulster Bank leaving, I personally regret KBC leaving. I think it's bad for the industry.

"I regret their decisions. I do understand them but I regret them," Mr Hunt said.

However, Mr Hunt said that despite their departure competition remained in the form of other new entrants

"It is important to remember that competition comes in multiple forms now. You've got fintechs, new banks, other international players just targeting specific parts of the landscape, whether it's credit cards, mortgages business banking. It remains a very competitive environment," he said.

Goodbody Stockbrokers

AIB was also recently cleared by the Competition and Consumer Protection Commission to acquire Goodbody Stockbrokers. However, in his opening statement to the committee, Mr Hunt again ruled out the suggestion that the stockbroker's acquisition was an attempt to circumvent pay restrictions on bankers.

Nothing could be further from the truth. The remuneration arrangements at Goodbody are entirely separate and ring-fenced from those at AIB and the Government restrictions on pay remain fully intact at the bank." 

"In order to streamline and avoid duplication, a very small group of employees from the bank will transfer to Goodbody.

"None of these can receive remuneration that exceeds the Government pay cap. In addition, apart from this group, Goodbody will not be permitted to hire anybody who has worked for AIB in the course of the previous two years."