Bank of Ireland agrees average of 4% pay hike

Bank of Ireland has agreed to pay an average 4 per cent pay increase to most of its 10,500 staff next year and make health insurance contributions of up to €1,400 a year for employees in the Republic.

The deal, which has been struck after negotiations with the Financial Services Union (FSU), is subject to acceptance by a staff ballot.

The new health insurance contribution comes after the Government agreed a year ago to ease previous restrictions on bonuses and health benefits that had been slapped on banks bailed out by taxpayers during the financial crisis.

Bank of Ireland said in February that it would introduce a staff bonus scheme next year, with maximum awards set at 10 per cent of an employee’s salary and capped at the Government’s new limit of €20,000. Bonus payments under the so-called profit-share agreement will be linked to group operating performance and individual performance.

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Meanwhile, some 8,000 employees – mainly in staff grades below manager that are also subject to the 4 per cent pay increase – will receive a so-called personal benefit payment of €200 next month.

“We are pleased to be able to provide our colleagues with clarity on pay and a number of enhancements for 2024 including a contribution towards their health insurance,” said Matt Elliott, chief people officer at the bank.

“It is important to reward colleagues for good performance and it is critical that this is linked to positive outcomes for our stakeholders, especially customers. That is why our profit share scheme is based on a range of elements that make our business stronger, more sustainable and benefit customers.”

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The bank’s main rival, AIB, last year agreed to a 10 per cent pay increase over three years for non-manager employees.

AIB also said last month that it would cap cash bonuses at €12,700 and introduce healthcare benefits for all employees in 2024 after the Government decided last year to relax crisis-era remuneration across rescued lenders.

PTSB has not yet outlined its future approach to variable pay.

The Government also lifted a general pay gap at Bank of Ireland last year as it sold its remaining shares in the lender.

The bank subsequently disclosed in its latest annual report in March that it plans to grant its chief executive, Myles O’Grady and chief financial officer, Mark Spain, shares of up to 50 per cent of their salaries in the coming years.

AIB and PTSB, in which the State continues to hold large stakes, remain subject to executive limits of €500,000.