Banking unions have today warned against private equity investment in Irish banks, claiming that thousands of jobs in the sector could be lost.
The Irish Bank Officials' Association (IBOA) said these funds were "predators" that would have disastrous consequences for Irish banks and the economy and called on the Government to reject this investment option.
The Unite trade union, which represents 15,000 workers in the financial service sector, has also stated its opposition to private equity investment in Irish banks.
IBOA general secretary Larry Broderick said: “Far from facilitating this development, the Government should intervene now to advise the bank that such an approach would offer a short-term easing of its current problems - but at too high a cost in the long term.”
“Private equity funds are the real sharks of the business world. . . . These people have no interest in the long-term viability of the business; they have no concern for the development of the Irish economy or the future well-being of the Irish people; they are only attracted by the prospect of massive returns on their investment.
“Predators like these aim to buy cheaply and reduce costs in whatever way they can. . . . They are not philanthropists. They are highly secretive entities that are feared and despised in equal measure throughout the business community,” he said.
Mr Broderick said the State would then have to deal with the long-term consequences of an even more distressed banking system. He added that “almost every reputable commentator” in the country had serious misgivings about such a development.
Over the weekend, it emerged at least two sovereign wealth funds from the Middle East might become investors in Bank of Ireland and possibly a merged group featuring Bank of Ireland and Irish Life Permanent through a private investment group.
The Government and the financial regulator are understood to have encouraged talks between Bank of Ireland and a private equity consortium.
But Mr Broderick said the involvement of private equity funds would undermine the objectives for the State’s banking guarantee, such as protecting the public interest, capping excessive remuneration packages, and providing for greater regulation and transparency.
The IBOA estimates any merger between Bank of Ireland and Irish Life and Permanent would lead to a loss of 3,500 jobs “at the very least”, with some 100 duplicate branches likely to be deemed surplus to requirements.
The Unite union said private equity investment Irish banks was “undesirable, unwanted and unacceptable”.
“As part of the world’s largest trade union, we have seen at first hand the wreckage which such investment leaves behind once a profit has been secured,” said Unite national officer Jerry Shanahan.
“The Government and the Minister for Finance must act quickly to send these ‘economic vultures’ packing and produce solutions to the current difficulties which are based on protecting our national interest in the long term as well as the next few months,” he said.
“These are difficult times for Irish banks, Irish workers and the Irish economy. We should not, however, walk blindly into the arms of investors whose sole motive is profit."
