Anglo Irish Bank gives 70 staff pay increases

 

STATE-OWNED Anglo Irish Bank, which will receive a further capital injection from the Government in the coming weeks after reporting the highest ever losses in Irish corporate history, has awarded pay increases to 70 staff.

Salary increases have been paid to 40 of the bank’s 800 staff in Ireland, 20 out of 370 staff in the UK and 10 out of 80 staff in the US where the employees’ jobs have changed following the voluntary redundancy plan under which 230 staff left the bank.

Minister for Community, Equality and Gaeltacht Affairs Pat Carey last night defended the pay award. The increase concerned a small number of non-senior specialist staff in England that had been recruited on a contract basis, Mr Carey said on RTÉ’s Prime Time.

It would not be possible to clean up the bank without the specialist staff and the chairman and members of the board “are satisfied that these particular staff are necessary,” he said.

However, Fine Gael TD Leo Varadkar called on the Minister for Finance to instruct the bank’s board not to pay the increases.

The bank said that before the nationalisation of the bank in January 2009, the remuneration for a substantial proportion of staff at the bank was bonus-related but this was no longer the case and as a result average take-home pay has been “substantially reduced”.

“Increases were awarded where roles and responsibilities have changed since the completion of the voluntary redundancy programme,” the bank said. “The increases were also awarded in situations where qualifications of direct relevance to the individuals day-to-day job were completed in the past 12 months.”

Two internal appointees on the new senior management team installed by chief executive Mike Aynsley are among the staff who received pay increases under the remuneration changes introduced by the bank in recent months, according to sources close to Anglo.

The bank has declined to reveal the scale of the pay increases, but said in its statement released to RTÉ’s Prime Timethat the increases would be “modest”.

The number of staff at Anglo has fallen to 1,240 from 1,800 following the redundancy programme, the sale of the banks operation in Austria, the transfer of staff to the bank’s internal unit monitoring loans moving to the National Asset Management Agency (Nama) and by not replacing staff who have left in the regular course of business.

Anglo is expected to post losses of almost €12 billion for the 15 months to December 31st, 2009 next week when the bank releases financial results for the first time since May 2009. Losses on bad loans amounting to about €14 billion mean that Anglo will report the highest losses ever reported by an Irish company.

This will trigger a further capital injection, possibly as much as €6 billion, from the State. The Government injected €4 billion into Anglo last year after half-year losses of €4.1 billion for the six months to the end of March 2009 obliterated the bank’s existing capital reserves. Anglo is the largest participant in Nama, transferring about €36 billion in loans.