Thursday, December 23, 2010

Bank directors remuneration immune moderation

The boards of the banks and building societies which are transferring heavily discounted loans to NAMA are populated by approximately 60 individuals, a significant number of whom have been in situ for many years prior to September 2008.  Their fees and remuneration from 2005 amounted to €148.4 million.

While 11,000 loans to 850 borrowers with a nominal value of €71.2 billion have been transferred to NAMA at a discount of 59%, the bona fides of each loan have to be painstakingly tested and evaluated because the representations of the banks and building societies cannot be trusted at face value.

But the 60 directors who lent this money and endorsed these transactions were paid remuneration and fees of €16.5 million in 2009. That may represent a haircut of 47% on the €31.2 million they were paid in 2008. But the losses incurred on the NAMA loans are equivalent to 180% of the remuneration they were paid last year.

It is from this rudderless, self-serving, opportunistic, morally bankrupt culture that bonus payments of tens of millions of euro are concocted and justified.  Will the Government intercept and definitively halt this wanton plundering of taxpayers money and the willy-nilly invention of yet more customer fees and charges in 2011 spearheaded by Bank of Ireland?

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