Union demands a better corporate governance in pillar banks

Banking union IBOA has said despite the positive stress tests results for most of the country’s pillar banks, there is still a need for better corporate governance in the major financial institutions.

General secretary Larry Broderick said his union welcomed the positive stress tests.

“It’s a reflection, in our view, of the significant contribution made by staff in terms of the major sacrifices with thousands of jobs lost and significant reductions in earnings,” said Mr Broderick.

“We are obviously disappointed that Permanent TSB hasn’t been in the same place as AIB and Bank of Ireland. But we are confident from what PTSB are saying, clearly indicating that they have a plan to address the inadequacy through investment and the Government seem to be supportive of that.”

He said he hoped the results marked a “significant change in the face of Irish banking”.

“My reservation is that a clear marker would be that there needs to be still a significant change in the culture in the industry going forward,” said Mr Broderick.

“We believe there is too much focus on the whole area of maximising profit. There needs to be better corporate governance and better engagement with the stakeholders, including the staff and the customers. There needs to be radical changes and that needs to be reflected at the executive level and at the board of the banks.”

Mr Broderick tried to reassure customers of PTSB that they should not panic regarding the stress test results.

“I think this [the PTSB fail] has not been a surprise,” he said. “Since last Wednesday, there did seem to be some leakage to reflect that PTSB may not necessarily address all of the stress tests. The Government has come out through the Minister for Finance earlier in the week, clearly saying they will not need capital and I understand [PTSB chief executive Jeremy] Masding is indicating very clearly that there are private investors out there interested in putting investment into it.

“I would be reassuring customers that while not in the same state as Bank of Ireland or AIB, PTSB are turning back into profitability. I would assure customers there is no need to panic.”

Mr Broderick also outlined details of a deal hammered out between his union and Bank of Ireland following nine months of negotiation under the auspice of independent mediator Martin King. The recommendation is to be put to a ballot of staff with the union recommending acceptance.

Mr Broderick said that Mr King had recommended a move to a new career structure in Bank of Ireland.

“Nobody has been paid increments or any salary progression or increases since 2009,” said Mr Broderick. “In return for the new career structure, he has recommended staff up to but excluding senior executives, would get a 5% lump sum which would buy out any previous arrangements they had and in return for the restructuring and the significant change in pension scheme and recognising the staff reductions, they would get a 1.75% increase on December 1 backdated to July 1 and they would get a 2% pay increase on January 1 for a period of 12 months.”