AIB to inform staff of plans to outsource IT and tech roles
Goldman Sachs to advise bank on capital restructuring options on a pro bono basis
Up to 450 positions could be affected by this move from the bank, which is 99.8 per cent owned by the State. Photograph: Brenda Fitzsimons/The Irish Times
AIB is expected to inform staff and their unions Tuesday about its plans to outsource certain IT and technology functions later this year.
Union representatives are due to hold talks with management at 8am, with staff being briefed later in the morning. Up to 450 positions could be affected by this move from the bank, which is 99.8 per cent owned by the State.
In a statement, AIB said: “There is an ongoing review of IT services at the bank. AIB has always adopted a partnership approach with its employees and their representatives when managing change. The review is being carried out in full consultation with the unions.’’
AIB declined to comment on the identity of the companies being lined up for the outsourcing roles.
Larry Broderick, general secretary of the Irish Bank Officials Association, said his union would be communicating to the bank the “extreme disappointment” of his members that these roles could be outsourced.
Mr Broderick said the IBOA would seek a “clear commitment” during any negotiations that the terms and conditions of staff would be protected and that any redundancies would be on voluntary basis.
Mr Broderick also confirmed that the bank union has begun “exploratory talks” with AIB about a pay rise for staff to reflect the cost of living, the fact that the bank is now back in profit, and that the State could soon sell a stake to private investors.
The IBOA is likely to seek a deal similar to one agreed recently with Bank of Ireland, which involves pay increases of 3.75 per cent over an 18-month period.
Separately, the Government has appointed Goldman Sachs International to advise it on potential capital restructuring actions in relation to the State’s investments in AIB.
This followed a “mini-tender” of members from one of the advisory panels set up by the Department of Finance last October to advise it on options relating to the State’s holdings in various Irish banks.
Goldman Sachs’s appointment is for a period of six months and is on a pro-bono basis. It is understood that 11 groups tendered for the role, with six of them offering to do it on a pro-bono basis.
Some 15 per cent of the marks under the tender scheme related to the cost of the work.
The Department said a separate tender process would be conducted for any transactions that flow from the advisory work by Goldman Sachs, which could extend beyond six months if necessary.
The duration of the contract with Goldman Sachs, and the fact that the Government would then have to take a decision on any recommendations, indicates that it will be the second half of this year before any action is taken in relation to AIB returning funds to the State, which gave the bank a €20.8 billion bailout.
Goldman Sachs work will look at the State’s 99.8 per cent stake in AIB, its €3.5 billion in preference shares and its contingent capital notes, or CoCos as they are more commonly known.
“Given the significant progress made by AIB in 2014 and the expectations for 2015 my officials are engaged in discussions with the bank’s management team to explore how best to reconfigure the bank’s capital structure to make it fit for purpose and agree a roadmap that will see the bank begin to return cash to the State,” the Minister for Finance Michael Noonan said.
He said the delivery of a work programme around the capital structure was an “essential prerequisite” for any future decisions on AIB.
Goldman Sachs has undertaken a number of assignments for the Government in relation to the banking system since 2011, most recently advising the department of finance in late 2013 on the sale of its preference shares in Bank of Ireland. This work was also carried out on a pro-bono basis.