Labour calls for BoI board overhaul

THE Labour Party has called for a restructuring of Bank of Ireland’s board of directors in the wake of a report which found it mislead the Dáil by giving the impression it had not paid senior staff bonuses when in fact it had.

Joan Burton, Labour’s finance spokesperson, and a member of the incoming administration, said it was time to get rid of those who “not just presided over failed lending practices, but who also told lies”.

She was commenting in the wake of a report which found BoI paid almost €66.4 million in bonuses after it had implied to the Department of Finance that no performance-related bonuses were being paid to its senior staff since the bank guarantee was given in September 2008.

Ms Burton said she was among those misled by misinformation given by the BoI. “For instance, in reply to a parliamentary question on December 16th last, the minister set out bonuses totalling nearly €40m paid by the guaranteed institutions since 30th September 2008. The sums recorded for Bank of Ireland were nil.”

However, an investigation ordered by the Department of Finance has found BoI paid bonuses to staff totalling almost €66.4m from September 2008 to the end of 2010. The payments comprised €43m in bonuses and commission payments of €23m.

The bank’s senior executive team were paid previously agreed bonuses amounting to €4.3m in 2009 and 2010.

Ms Burton said the findings of the investigation showed little has changed in banking culture since the guarantee was given.

Independent TD Shane Ross said BoI’s behaviour was “just another example of what sort of tricks and semantics that banks can get up to”.

He said they took the “narrowest possible interpretation” of the meaning of bonuses. “But in effect they were obscuring the fact that a large number of people in the Bank of Ireland were getting a lot of bonuses which we didn’t know about and which is certainly totally and utterly wrong in the present circumstances when it’s owned by the state and losing money,” Mr Ross said.

Mr Ross said the banks had only come clean “when they had to, after an investigation”, but the question had to be asked if anything would happen on foot of the revelations.

It was his opinion, Mr Ross said, that “nothing is going to happen, except that €2m (which BoI has offered to pay to the exchequer) is going to be taken out of a busted bank’s balance sheet, paid for by the taxpayer and there’s going to be bonuses given back to the staff. The lesson from this is they’ve learned absolutely nothing and the same sort of culture exists in the bank as existed three years ago,” Mr Ross told RTÉ news.

BoI said yesterday that since January 2009, it has “only made non-salary bonus type payments where it has a clear legal obligation to do so, or where the Bank believes there is a clear commercial case that is in the best interests of the business and its stakeholders (including the state) to have such arrangements and adhere to the contractual obligations arising there from”.