Bank of Ireland has issued a cautious trading outlook telling shareholders that while the first three months of its financial year have been satisfactory, economic conditions have slowed.
Speaking at its annual general court in Dublin yesterday, Bank of Ireland governor, Mr Lawrence Crowley, said the bank faced challenges as lower interest rates and a stronger euro take its toll on the business.
"Whilst stock markets have improved somewhat in the second quarter of the calendar year, sales of life and pensions products remain difficult in the current environment and the strengthening of the euro against sterling will have a negative effect on the translation of our overseas earnings," he told the meeting.
Mr Crowley added that the bank was confident that it could face these challenges and, based on stock markets and exchange rates remaining at current levels, it could foresee a continued good performance in the current year. "The Irish economy is not achieving the spectacular growth rates that characterised the 1990s but the current and prospective economic growth rates for the two principal economies in which we operate, Ireland and the UK, are expected to outstrip the EU average," he said.
During the more than two-hour meeting, Mr Crowley fielded dozens of questions with shareholders expressing concern about the threatened one-day strike at its IT services subsidiary, ITSIS, and the €1.6 million paid to group chief executive, Mr Michael Soden.
The governor insisted that the bank was not selling its 300 information technology staff "down the river" referring to the row over the planned outsourcing of the bank's IT operations to Hewlett-Packard.
On Wednesday, the Irish Bank Officials Association (IBOA) put the bank on notice of a 24-hour strike at ITSIS on July 23rd.
Mr Crowley told shareholders the bank had been "surprised and disappointed" that the strike notice had been served and said that discussions between the two sides were continuing. "We have consulted extensively with staff. Outsourcing the IT services subsidiary, ITSIS, is not a threat to jobs" he insisted.
Shareholder, Mr Des Sheridan, said he believed the 300 staff who would transfer to Hewlett-Packard and have guaranteed their jobs for just two years, deserved better treatment. "These are the people who kept the bank going in 1992 and now they are being cast off and handed over the Hewlett-Packard" he said.
Mr Ed Phelan, an ITSIS employee, said his colleagues felt "very betrayed" by current events. "What can you do to allay our fears? Why can't you make some sort of pledge?" He told the meeting that the staff were not looking for commitments in relation to money but looking for a guarantee that their jobs were safe. "We are asking for some common decency and respect to be shown for the years we have worked. We want to protect our families and mortgages. We are willing to deal with you but don't sell us out" he said to great applause.
The other bugbear was Mr Soden's €1.6 million remuneration package. One man described as "excessive" and accused the bank of "rubbing butter to the fat pig's backside".
Mr Crowley defended the payments saying the bank took extensive advice on the incentives it should provide to its top management and that it had to keep an eye on international trends.
