Report reveals BoI’s €66m bonuses

BANK of Ireland has paid €66.37 million in bonus payments to staff since the introduction of the Government bank guarantee scheme in September 2008, and it has earmarked a further €21m for bonus-type payments this year.

The revelations, in a Department of Finance (DoF) probe into bonus payments made by BoI since the introduction of the guarantee, have been described by Labour as truly shocking.

Party finance spokeswoman Joan Burton said the report revealed how “little has changed in the culture in the banks that contributed so much to the current economic crisis”.

She said references in the report to “misleading information” being provided by the bank was “simply a polite way of saying that the government and the public were lied to”.

The €21m in fresh payments revealed in the report are expected to be hit with a 90% bank bonus tax introduced in the Finance Bill.

Last night the department said the tax “will apply to any future bonuses paid by BoI or any institution while in receipt of state support”.

BoI is also to pay €2m to the Exchequer for providing “misleading information”. This information resulted in Finance Minister Brian Lenihan telling the Dáil last November that no performance-related bonuses were paid by the bank to senior staff when they were.

The report, ordered by Mr Lenihan, found bonus payments to the bank’s senior executive team were “in accordance with the subscription agreement governing the recapitalisation”.

The report said the investigation is believed to have got to the bottom of all the bonus payments but that it was not in a position “to audit or forensically examine” the data provided by BoI.

“The level of information provided suggests that there would be little point in the bank deliberately concealing other information, although the catalogue of errors committed by the bank throughout this episode still gives cause for some residual risks,” the DoF team said.

BoI “still has not unequivocally accepted that the information it provided was incorrect although it has apologised”. The bank has not accepted that all of the payments regarded as bonus or quasi-bonus by the team are bonuses.

The €66.37m is made up of: Discretionary bonus payments of circa €1m; guaranteed bonuses, contractual guarantees, and deferred bonuses of €30.792m; retention payments of €11.359m; and commission payments, €23.244m.

The €21m includes €11m in bonus categories where payment has been deferred or with respect to retention payments and €10m on commission payments.