AIB chief executive vows to tackle property loans to managers
The head of the State’s biggest bank has vowed to fire any managers who use loans from their own institution to become property developers or investors.
David Duffy, the chief executive of AIB, said that, while he does not have the exact details of how many of the bank’s staff used loans during the Celtic Tiger to dabble in the property market, he accepts that the practice prevailed.
But the days of the banker becoming the investor are now over at AIB, he said, promising to root out and dismiss any manager or other member of staff who used their position to borrow the bank’s money for their own gain.
Mr Duffy, speaking in Galway where he met staff and customers on a week-long visit, said there no longer can be any compromise on ethics.
“You can’t be the banker and the customer. It doesn’t work, never has and never will. I can tell you there won’t be a single incident of that in this bank ever again.
“If we find it, we will remove the person: it’s that simple. This is a bad control culture, it is a bad risk culture, it is a bad ethical behaviour and standard,” said Mr Duffy, who took over as AIB chief executive in December 2011.
He said the restructuring of AIB required a culture change and that he was determined to be rigid on ethics. He accepted that there were cases of bankers lending to themselves and competing with their own customers.
“I didn’t get to look back in detail, analyse who was who and what was what, but there were incidents. I think in the whole community there was definitely instances of people who were investing alongside lending. I think, as a banker, you can’t be an investor in a deal that you lend to. Nobody would ever do that in a long-term integrity based situation, you just can’t,” he said.