Latest departure reignites bankers' pay debate
One More Thing:Recent warnings from Irish Bank Resolution Corporation’s top brass about their ability to attract and retain key staff given the Government’s pay cap and the fact that it is in wind-down mode will be put to the test following the decision of Gerard Davis to hand in his notice.
Davis runs the wealth management division of the former Anglo Irish Bank, which of course is now part of IBRC. Staff have been told Davis will leave on December 31st for another Irish financial group.
IBRC chief executive Mike Aynsley warned earlier this month that the loss of important staff would cost the taxpayer in the long run. He was speaking out in defence of the €500,000-plus packages being paid to seven senior executives at the bank, including himself.
Speaking at an Oireachtas committee last month, IBRC’s chairman Alan Dukes bemoaned the “unacceptable” rate at which the State-owned group was losing staff to other institutions because it could not offer a long-term career path or sufficiently attractive remuneration packages.
The wealth management business has been the subject of some pulling and dragging over the past year. The bank had looked at disposing of the business and entered into a period of “exclusive” negotiations with specialist finance group Key Capital last February.
In April, it abandoned the deal, saying that it would not result in the best outcome for “all stakeholders”, and that it would “wind down” the division over five years.
Davis’s role as head of wealth management at IBRC was something of a misnomer, given the devastation that the collapse of the bank and the property crash has wrought on the wealth of its customers.
In the boom-time days of Anglo Irish Bank, the division had packaged up property deals for customers of the bank, most of whom used loans from Anglo to participate. They were sold as investments through the bank’s insurance arm, Anglo Irish Assurance Company.
Given that the former Anglo private bank is now to be wound down rather than getting a new lease of life under another owner, the bank might be hard-pressed to find a replacement for Davis, particularly if the public anger over banker pay precludes it from paying up for the right person.