BoI to pay €2m over staff bonuses

Bank of Ireland is to pay €2 million to the exchequer for providing "misleading" information on bonuses paid to staff.

An investigation ordered by the Department of Finance shows the bank paid staff bonuses totalling nearly €66.4 million from September 2008 to the end of last year.

The bank had previously implied that no bonuses had been paid to senior management since the bank guarantee scheme was introduced in September 2008. This information was provided to the Minister for Finance Brian Lenihan who in turn used it as a response to a Dáil question on bank bonuses.

Other financial institutions covered by the bank guarantee scheme have paid out a total of almost €46 million in bonuses between 2008 and 2010.

The new report shows that members of Bank of Ireland's senior executive team were paid previously agreed bonuses amounting to €4.3m in 2009 and 2010.

The bank also said it is due to pay contractual bonuses of €0.6 million to senior staff this year and a further €0.2 million in 2012.

Mr Lenihan said he was "dissatisfied" with the approach of the bank to the overall investigation process and its use of a definition of performance related bonus "which is at odds with normal usage."

He said he had made it clear to the bank that the number of discrepancies which have come to light during the investigation were "unacceptable."

A statement from the Department of Finance said the Minister had accepted an offer of €2 million from Bank of Ireland in compensation for misleading both Mr Lenihan and the Oireachtas.

Bank of Ireland has previously admitted providing incorrect information but said there was never any intention to mislead the department.

The Labour Party described the investigation's findings as "shocking" and said they show that little has changed in the culture of Irish banks.

The party's finance spokeswoman Joan Burton called for BoI's board to be restructured to ensure replacement of directors who "not just presided over failed lending practices, but who also told lied."

"Despite the reckless conduct of those in senior positions in the banks that led to the crisis in the first place, Fianna Fáil failed to deliver the comprehensive cleanout of personnel at board and senior management level that was required," she said.

"The failure of Bank of Ireland's to come clean on bonuses is just the one further act of deceit," she added.