NIB management shake-up imminent

A shake-up in senior management in National Irish Bank is in prospect. The bank is in discussions with a number of senior managers about terms on which they would leave the organisation.

The negotiations between legal representatives of the bank and the managers follow the recent controversy about the bank's practices in overcharging customers and directing funds towards offshore accounts.

A report into the controversy by accountants Arthur Andersen - commissioned by the bank - is still underway and is understood to be some way from completion. The bank has undertaken to publish the report, in so far as possible given legal constraints.

Questioned on the negotiations with senior managers about leaving NIB, a spokeswoman for the bank said that no executives were available to comment last night.

The overcharging is also being investigated by the Garda, the Revenue Commissioners, the Central Bank and by inspectors appointed by the Tanaiste, Ms Harney. The inspectors are accountant, Mr Tom Grace and former Supreme court judge, Mr Justice John Blayney.

The expected departure of a number of senior managers is set to renew speculation about the long-term future of the bank. Its parent, National Australia Bank, has said it will not sell its Irish subsidiary.

But given the damage to NIB's image from the controversy, sources believe that a sale by the Australians is still a likely outcome in the longer term. This is made more likely because NIB is NAB's only subsidiary in a zone where the euro currency will circulate, and preparing for the single currency will mean substantial costs for the organisation.

National Irish Bank employs around 700 people in the Republic, although redundancies are expected as part of a general cut-back by NAB of its European operations.