'Bank officials had the support of customers - that's gone now'

Working for reduced wages and with job cuts looming, many staff at AIB now resent their employer as much as the public does

FOR GENERATIONS Allied Irish Banks was a sought- after employer at a time when jobs, especially good ones, were scarce. The bank was the private-sector equivalent of the Civil Service, offering permanent, pensionable positions and a career path. At the same time, as a highly profitable private-sector employer, it offered bonuses, share options and preferential loans to its employees.

No Irish company has fallen as far or as fast as AIB. It was once Ireland’s biggest public company by market capitalisation; now it is a failed bank – a fact belatedly acknowledged by management this week when it conceded it would be depending on the State for survival for “some time to come”.

AIB’s stock with the Irish public has sunk as precipitously as its share price. The debacle over proposals to pay bonuses worth €40 million, along with public fury at the bank’s failure to offer a defence to a court action demanding the bonuses, is only the latest in a series of public-relations disasters that have affected staff morale.

Staff have remained largely silent as they witnessed the unfolding disaster at AIB, but the fact that they, rather than bank management, are now the subject of public vilification prompted a few of them to speak to The Irish Times.

“In the good times, bank officials had the support and respect of customers,” says Claire Walsh, who works for AIB in Longford and is a representative with the Irish Bank Officials’ Association (IBOA).

“That’s gone by the wayside now. Staff seem to be fair game for abuse. The public don’t see a difference between people on the frontline and those at the top who made the decisions.”

The bonus issue has infuriated those who were due to receive them. One, who wanted to give his own account to the media about the bonus situation, was told by a colleague in human resources that speaking out in this way could have repercussions for his future career.

An employee who works in back offices at the capital-markets division says the bonus that he was due to receive was the equivalent of a month’s salary after tax and “nowhere near” the €16,000 average that has been extrapolated by dividing the 2,200 staff who were due to receive them by the amounts involved.

“For us it was not a bonus. It was related to our performance,” he says. “Our salaries would be benchmarked. If you were doing a good job, going the extra mile in a back-office environment, you are rated in the top grade. If you are just doing your job, you are ranked in the lowest grade. It was performance remuneration.

“On foot of the court case that was taken, we all fell into line to take the money. People were told last month they were getting the money in their December pay packets,” he says. “From what I heard, people who have kids and mortgages spent that money in advance on the strength of getting the money yesterday .

“My problem is that we have been lumped in with the rest of the group that are getting the massive amounts of money. We are not getting excessive money by any means. It needs to be told that not everybody is getting €160,000 . We’re struggling too. There’s no doubt about it.”

The share collapse at AIB affected staff disproportionately as most were encouraged to buy shares in lieu of cash bonuses.

“I lost the price of a house,” says one AIB employee who has spent nearly 30 years with the company. “Twice a year we’d get an offer of shares, and in a particularly good year we’d get a bonus in cash, but most took it in shares because it was more tax-efficient. It was supposed to be blue-chip stuff. Some AIB staff would have sold their shares and made nice profits on them, but quite a lot would have held on to the shares and never sold them. They are now worthless. That story has not been told.”

The worker says e-mails were sent to staff in 2008 and 2009 reassuring them that the bank’s difficulties were temporary. Many believed management until it was too late.

“I’d like to ask Eugene Sheehy and Dermot Gleeson to compensate me for the loss of my life savings,” he adds.

Irish Bank Officials Association general secretary Larry Broderick says AIB staff have been constantly misled by management since 2008.

First they were told the bank was well capitalised and that the bank guarantee was for the benefit of Anglo-Irish Bank, not AIB. As the crisis deepened they were told AIB would “rather die” than take equity from the state in the now infamous words of Sheehy; that the haircut on loans to Nama would only be in the order of 20 per cent (it is likely to be closer to 50 per cent); and that it could escape public ownership, a forlorn hope given the scale of its problems.

“I would not call management liars,” says Broderick. “My hope is that they had been totally naive and got it wrong. They have been reassuring staff and, in everything they say, they have lost total credibility.”

A survey by the IBOA earlier this year found three-quarters of bank officials who deal directly with the public have been subjected to abuse, most of it verbal, and 40 per cent got it on a regular basis.

Nevertheless, Fianna Fáil TD Chris Andrews, whose Dáil question exposed the bonus issue, says people are able to distinguish between AIB management and those who work at branch level.

“It is clear that the management that have run AIB into the ground are not fit for purpose. They seem to be the only people in this country who don’t know the world has changed,” he says.

It would have been inconceivable when AIB was posting €2.6 billion profits four years ago that staff would face redundancies, but the announcement by Minister for Finance Brian Lenihan in his recent Budget speech that the banks would be smaller in future has been taken as code that redundancies among AIB’s 24,000 staff are inevitable. Figures of 2,000 redundancies for next year have been reported.

One retired bank manager declined to be named because “I have only good memories of AIB . . . We were proud to work there. That is gone and it will never be recovered. Staff were lied to more extravagantly than anyone else. Anything that they ever believed was pulled from under them. It will never be the bank that I worked in again.”