AIB report delayed as investigation widens

AIB was accused of running from public scrutiny last night after it said its report into overcharging foreign exchange customers would be delayed for six weeks.

The bank said its investigation had been widened and would not be completed until the end of July.

Labour finance spokesperson Joan Burton said the delay further damaged consumer confidence in banks.

"This mothballs AIB making itself publicly accountable to the Dáil," Ms Burton said. She called on AIB chief executive Michael Buckley and chairman Dermot Gleeson to reconsider their decision not to appear before the Dáil finance committee until the investigation was complete.

The committee had expected both men to appear before it in July, she said, but yesterday's announcement meant they would not face public scrutiny until after the Dáil summer recess.

The bank said its investigation would cover all customer charges from 1996 that were subject to approval from regulators. The investigation is being carried out by accounting firm Deloitte, under the supervision of former Comptroller and Auditor General Lauri McDonnell and the Irish Financial Services Regulatory Authority (IFSRA), and had originally been confined to foreign exchange charges.

"Having been advised by IFSRA, Mr McDonnell and Deloitte, AIB has now agreed that more time is required to progress the work," AIB said in a statement yesterday.

AIB said last month it had been charging foreign exchange customers at higher rates than had been approved by regulators. The bank has already lodged €25 million with the Central Bank to cover the cost of refunds to customers.

The investigation will provide three reports. The first will deal with the exact amounts involved in the overcharging scandal and the number of customers affected. A second report, which the bank said would follow "shortly afterwards", will outline how the overcharging occurred and why it continued for so long without being noticed.

The final report will deal with AIB's internal systems and controls and is expected to concentrate on the measures the bank has in place to prevent overcharging and comply with regulations.

The bank is the subject of a series of investigations into alleged tax evasion by Faldor, an offshore investment company linked to five former senior executives. The bank also said last month it had identified two other former executives and three current senior staff, who had "tax issues" unconnected to the offshore company.

IFSRA, the Revenue Commissioners and the Office of the Director of Corporate Enforcement are holding separate inquiries into alleged malpractice at the bank.

It also emerged yesterday that former Bank of Ireland chief executive Michael Soden, who resigned last month after viewing adult websites on his work computer, was paid a €554,000 bonus in his last year with the bank. His total pay package rose 21% to almost €1.6 million last year. His basic salary went up 13% to €900,000.

But it is unclear whether Mr Soden will receive more money or if he is entitled to a severance payment. Bank of Ireland declined to give further details yesterday.