Flynn may mediate in proposed bank merger

The chairman of ICC bank Mr Phil Flynn has been asked to make himself available for talks to resolve renewed difficulties which have arisen over plans to merge the TSB and ACC into Newbank.

The invitation is understood to have originated with the Minister for Finance Mr McCreevy, who relayed his concerns about the problems being encountered in the merger to the TSB and ACC management some weeks ago. Subsequently a request for Mr Flynn's services was made by the ACC.

Yesterday Mr Flynn refused to comment on the merger. However he did say, "I was approached and asked if I would be available, if acceptable to all parties and indicated that I would be".

It will probably be decided this week if Mr Flynn's services are required, after Mr McCreevy meets with SIPTU representatives from the ACC workforce. At the root of the problem are the strained relations between the chief executive of the TSB, Mr Harry Lorton and ACC staff, who fear their interests are losing out in the merger.

An emergency annual general meeting of ACC staff was held in Dublin on Saturday to discuss the situation. Despite the short notice over 200 of the 480 SIPTU members in the ACC attended the meeting in Liberty Hall.

On Friday Mr McCreevy sent an invitation to SIPTU to meet with staff representatives this week to discuss their concerns. Saturday's meeting was closed to the public but SIPTU regional secretary Mr Jack Nash said yesterday that, "if it hadn't been for the Minister's letter there would have been an immediate demand to pull out of the merger process".

He added that the growing resistance to the merger was "not just about decisions being taken, but the manner in which they are being taken, in indecent haste and without concern for our members in ACC". He accused the management team responsible for the merger of adopting a "cavalier attitude to negotiations. People feel if that's the attitude at this stage what will be the attitude after the merger."

Some people at the meeting felt Mr McCreevy's invitation was "too little, too late". Nevertheless they agreed reluctantly to defer a ballot on withdrawal from the merger process to allow it go ahead.

Among the issues that have particularly concerned ACC members is the decision that the TSB's IT system, Unisys, be used by Newbank. ACC members believe it is "antiquated". The proposal to locate the merged bank's IT operations in Cork, in line with existing TSB arrangements, has also fuelled fears for jobs within ACC.

ACC union sources said yesterday that objective criteria would have to be adopted if ACC staff were to be persuaded that their interests would be looked after in the merger. Part of this process would have to be a revisiting of measures such as those already decided upon in the IT area.

Another cause of resentment amongst ACC staff is the feeling that the proposed employee share option (ESOP) for Newbank will benefit TSB staff more than those in ACC. Both companies are equally profitable, but the TSB employs about 950 people, compared with 490 in ACC.

If Newbank is successfully launched on target next May, the employees can each expect a shareholding worth between £50,000 and £60,000. According to ACC union sources this would be around £18,000 less than in an ACC stand alone ESOP. In contrast, TSB members will benefit by about £9,000 each.

One problem is that TSB, unlike the ACC, is not owned by the Government. This gives the TSB management a much stronger negotiating position than their colleagues in ACC.