Monday, March 7, 2011

Public Outrage at Bank of Ireland extravagant bonuses

Last Saturday I spent a pleasant few hours with fellow hill walkers strolling along the 14KM stretch along the banks of the River Dodder. The controversial topic of Bank of Ireland bonus payments got an airing. These men and women of the world walking with me were aghast at what emerged in a Department of Finance Report on the matter as this Bank gave the Irish public the V sign.

A parliamentary question sought information in November 2010 on bonus payments to staff made by banks since the commencement of the Irish Government guarantee in September 2008. The Bank of Ireland advised the Department of Finance that “no performance-related bonuses were paid with respect to the financial year to March 2009 and December 2009”.

The statement added “a small number of people at middle management level received payments which reflected either guarantees which were agreed on their joining the Group or deferred payments where the historic performance criteria had been achieved and the payment was deferred over several years. For commercial reasons Bank of Ireland do not disclose the amount of such payments. The Bank advises that it had not legal discretion in these matters”

The loss at Bank of Ireland for the 9 months ended 31 December 2009 had risen to €1,813 million compared to €23 million for the year ended 31 March 2008. Impairment charges in this period reached €4,055 million compared to €1,435 in the year ended 31 March 2009. The Irish Government was forced to invest €3.5 billion in preference stock so as to bolster its capital base.

It transpired that the information provided by Bank of Ireland was incorrect and that bonus and quasi bonus payments from September 2008 to December 2010 amounted to a staggering €66.37 million – all linked to performance.

A patina of legal legitimacy is not an indication that any transaction is ethical, moral or affordable.

The hill walkers are utterly mesmerised that Bank of Ireland could be so utterly undermined in the Bank by duplicity, betrayal, self-serving slovenliness and skulduggery. These characteristics are evident not just in grotesque scale of bonus payments, which the Bank (and the public) cannot afford and untruthful answers to parliamentary questions, but there is now also evidence of incomplete and misleading information in the due diligence process prior to the public subscription for shares, in the attempted enhancement of the Group Chief Executives pension terms last year and the tardiness by the Bank in relation to the subsequent impeded and delayed investigation into the November 2010 misrepresentations to Dáil Éireann.

  1. These bonuses, especially in the prevailing circumstances, amount to the barefaced looting of society – on a scale commonly seen in Russia, Africa and Asia.
  2. The explanation that bonuses are ‘open to different interpretations’ and the comment by Arthur Cox that Bank of Ireland “used a restrictive and uncommon interpretation of what constituted a performance bonus” describes a crazy mentality of a type not untypical of occupants of padded cells in a lunatic asylum, whose capacity to communicate in vernacular English is very limited; who have ‘no intention to mislead’ and are likely to recognise this in lucid moments to avoid personal embarrassment.
  3. The implication that the Irish people, who have been fleeced of €3.5 billion by Bank of Ireland, can now be bought for €2 million paid by Bank of Ireland to the Exchequer ‘to recognise the difficulties cased by the way the Bank handled the matter’  will simply  create a veneer of indulgence and camouflage to enable them to be further fleeced of, not just €66.37 million, but an additional €21 million in respect of bonuses and commissions in 2011 and other amounts in 2012 is outrageous and abominable.
  4. The suggestion that any future parliamentary questions in relation to personnel or other important matters be authorised by the Group Chief Executive beggars belief on grounds of credibility. The Report indicates that overall payments totalling €1.2 million were not disclosed in the due diligence process prior to the public bailout.
  5. The Sunday Tribune on 30 January 2011 that the Group Chief Executive of Bank of Ireland directly intervened with the planning authorities in October 2007 in connection with the proposed Sean Dunne development that would have cloned Jurys/Berkeley Court Ballsbridge hotel sites with Calcutta, had it been heeded?

The text of the letter from Richie Boucher to Dublin City Council planning authorities read:

“Dear Sir

Re Jurys / Berkeley Court Site

I refer to the above and write to confirm my strong support for this landmark proposal which I believe will significantly benefit the City of Dublin and its citizens through helping enhance the concept of a living city and providing buildings of significant architectural merit befitting Ireland of the 21st century. Yours faithfully, Richie Boucher, Chief Executive Retail Financial Services Ireland.”

Dublin City Council granted partial permission for the Ballsbridge development but it disallowed Dunne’s application to build a 37-floor skyscraper.

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