We had ‘no choice’ but to pay ex­ec­u­tive six-fig­ure bonus: Ire­land Bank of­fi­cial

The Pak Banker - - Front Page -

DUBLIN: Se­nior Bank of Ire­land (BoI) fig­ures said yes­ter­day the bank had "no choice" but to pay an out­ra­geous six-fig­ure bonus to one of its ex­ec­u­tives, de­spite the bank re­ceiv­ing bil­lions in sup­port from tax­payer.

Man­age­ment at the bank strongly de­nied the fig­ure was as high as the €500,000 quoted in yes­ter­day's Ir­ish In­de­pen­dent. Man­age­ment also said that the bonus was paid sev­eral months ago, not in "re­cent days", as re­ported.

Pay­ment of the bonus to an ex­ec­u­tive at the Bank of Ire­land As­set Man­age­ment (BIAM) has in­fu­ri­ated Fi­nance Min­is­ter Brian Leni­han.

Mr Leni­han has de­manded a speedy ex­pla­na­tion as to why the money was paid out. How­ever, the bank sources said the mat­ter was "in­cred­i­bly sen­si­tive" and was a dif­fi­cult sit­u­a­tion to re­solve.

"We have le­gal re­quire­ments which we must fol­low," one se­nior source said. "The bank is highly re­liant on a num­ber of key peo­ple within com­pa­nies that we are try­ing to sell off, to boost our cap­i­tal­i­sa­tion lev­els.

"We have to walk a fine line. A large num­ber of key peo­ple have walked off the job in the past five or six years from BIAM." The source added that the bank's lawyers had stud­ied the sit­u­a­tion very care­fully and that it had no choice but to pay the bonus. "Do we want to pay this bonus? No. Do we have to? Yes," one se­nior bank ex­ec­u­tive said.

The lat­est bonus ou­trage comes as the six banks bailed out by the tax­payer have paid bonuses to­talling €45m since be­ing guar­an­teed by the State, in­clud­ing €20m to staff at the failed An­glo Ir­ish Bank.

Amid on­go­ing pub­lic ou­trage over the pay­ment of bonuses to bankers, even af­ter they begged for sup­port in 2008, the rev­e­la­tion that a se­nior banker at BIAM was paid a mas­sive se­cret bonus has drawn a fu­ri­ous re­ac­tion from Mr Leni­han, who knew noth­ing about it.

Mr Leni­han has de­manded the bank ex­plain the pay­ment to him and bank sources have con­firmed that it will sup­ply the rel­e­vant in­for­ma­tion to the min­is­ter to­mor­row.

"The pay­ment was not no­ti­fied to the min­is­ter, the NTMA or the depart­ment. We are await­ing an ex­pla­na­tion from the Bank of Ire­land," Mr Leni­han's spokesman said.

How­ever, a se­nior fi­nance source yes­ter­day re­vealed the ex­tent of Mr Leni­han's fury. "We're not happy, and if it was out­side the terms of the agree­ment with the Govern­ment, then it is a breach of con­tract and it is very se­ri­ous." Un­der the terms of the Sub­scrip­tion Agree­ment that the bank signed on re­ceiv­ing tax­pay­ers' money in March 2009, it had to dis­close pay­ments of bonuses con­nected to work done be­tween 2006 and 2008 to the min­is­ter. -PB News

IS­LAM­ABAD: Fed­eral Min­is­ter for In­te­rior, Sen­a­tor A. Rehman Ma­lik hav­ing a meet­ing with Gover­nor Khy­ber Pukhtoonkhwa Owais Ah­mad Ghani, at KPK House. -On­line

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