AIB moves to outsource jobs
Changes in how the bank does business are necessary to secure its future and to enhance its investment value
Minister for Finance Michael Noonan is confident that €20.8 billion invested by the State to save AIB can, in time, be fully recouped by the taxpayer. But it may yet, as the bank’s chief executive David Duffy has said, take a decade for that to happen. At present, the State holds a 99.8 per cent stake in AIB, and the Department of Finance is in discussion with the bank’s management on the best way to restructure the bank’s capital. The department has also retained investment bank Goldman Sachs as an adviser on a pro bono basis. These and other changes in how the bank does business are necessary both to secure AIB’s future and to enhance its investment value – ensuring its full financial potential can be realised for the State – when ultimately the bank is sold back to the private sector.
But before that can happen further reform of the bank’s operations is necessary. AIB, as part of its programme of adjustment and cost cutting, has announced plans to outsource some of its IT and technology operations to three service providers. Some 150 employees will be affected by the change. The bank does not envisage redundancies will be necessary as the affected staff will be transferred to new employers.
AIB will open discussions with the Irish Bank Officials Association to secure agreement on its proposals, favouring as it has said, a “partnership approach”. It remains a shadow of its former self and, like other Irish banks, it has undergone major transformation – involving substantial job cuts and major changes in work practices – in adapting to a smaller market and huge adjustments required due to new banking practices.
Since 2009, some €64 billion was needed to rescue Irish banks. Many people then were sceptical that much of the bailout money could ever be recouped for the taxpayer. Now, assuming the rapid pace of economic recovery can be sustained in the medium term, it seems that almost half that sum may well be repaid. It is regrettable that bank workers, few of whom bore any blame for the financial crisis, have borne much of the burden in job losses, pay cuts and poorer conditions.