AIB culture ‘not flawed, despite scandals’

AIB management yesterday denied a flawed culture within the bank led to the recent overcharging scandals.

However, AIB chairman Dermot Gleeson told the Oireachtas Finance and Public Service committee yesterday that a report commissioned by the bank had concluded some changes needed to be made.

Citing Concours Group research into the work culture within AIB, Mr Gleeson said: “The overall conclusions are that AIB has a sound culture. It is not fundamentally flawed but some work needs to be done.”

To date, AIB has discovered 1.1 million foreign exchange transactions which are eligible for refunds involving 173,000 accounts going back eight years.

So far €12.7m of the €26.1m due for foreign exchange transactions has been paid. Another €8.1m of arrears errors due on other products will be paid by the end of this year.

Accepting responsibility for AIB’s unauthorised overcharging on foreign exchange transactions over a period of eight years, Mr Gleeson said the matter was of serious concern.

“This was clearly a management failure. We have made it very clear that any such failure is regarded very seriously,” he said.

However, Mr Gleeson played down the scale of the scandal, saying it had gone undetected for so long because AIB’s customers were not complaining.

While acknowledging that AIB was charging more than it had sought permission to charge, Mr Gleeson said foreign exchange rates were no higher than those at other banks.

“If we had sent in the prices that were actually up on the board in the bank, they’d have been okayed, and customers would have paid those as they did.

“Our customers are now in effect getting the last eight years of foreign exchange at half price,” Mr Gleeson said.

Fine Gael finance spokesman Richard Bruton said the succession of scandals at AIB could not be likened to some small “grains slipping through the sieve” and instead the scale of the scandals suggested a much more fundamental problem, he said.

“The AIB has a pivotal role in the Irish economy, yet concerns persist that it has not always played an honourable role or maintained the highest of standards in its relationship with its customers,” he said.

Labour finance spokeswoman Joan Burton criticised the fact that both external and internal auditors, as well as senior management, had proved unaccountable.