Irish finance minister bans AIB bonuses

 
Marion Dakers
WORKERS at bailed-out Allied Irish Banks were left reeling after Irish finance minister Brian Lenihan dramatically intervened to block their bonus payments yesterday.

AIB’s board decided last night to revoke the €40bn (£33.8m) bonus pool after Lenihan wrote to the bank threatening to withdraw state support or ban the payouts in law if AIB did not voluntarily step down.

The bank is 19 per cent owned by the taxpayer following a €3.5bn bailout, and more public money is expected to support AIB as part of Ireland’s €110bn bailout from the EU and the IMF.

AIB executive chairman David Hodgkinson said last night: “The board of AIB very much welcomes the actions of the minister and is relieved to be in a position not to pay these bonuses. We are determined to position the bank to play a full role in the recovery and development of the Irish economy.”

Around 2,400 staff were due to be paid backdated bonuses on Friday, following a successful lawsuit brought by a trader over the suspension of his bonus for work done in 2008.

Hodgkinson said the bank had received “strong legal advice that it was obliged to pay these bonuses”.

The bonus pool provoked a widespread political backlash last week when the bank ploughed on with plans to pay out.

AIB staff are usually able to make complaints and suggestions directly to the chairman, and it is thought that the bank has not set up extra channels to deal with objections to yesterday’s ruling.

FAST FACTS | ALLIED IRISH BANKS

AIB was formed when three Irish banks merged in 1966, and was bailed out in 2008

The Irish government could take upwards of 90 per cent of the bank into public ownership as part of the country’s EU and IMF bailout