Dukes defends decision not to cut staff pay

THE CHAIRMAN of Irish Bank Resolution Corporation, formerly Anglo Irish Bank, has defended the bank’s decision not to apply pay cuts to staff, saying that the bank’s employees had lost benefits since the banking crisis began.

Alan Dukes said staff numbers had fallen substantially since 2008 and that more would be leaving over the coming year. He told The Irish Times that the bank’s remaining employees had lost benefits since 2008 which amounted to large pay cuts.

Minister for Finance Michael Noonan said in a response to a parliamentary question – reported on earlier this week – that no pay cuts had been applied to staff at IBRC in 2009, 2010 and 2011.

Mr Dukes said one of the problems facing the bank was retaining skilled staff to manage the long-term wind-down of the bank and sale of assets to secure the best return for the State. “We need people who know what they’re doing to wind down the bank. Other banks, including AIB, are poaching our staff by offering bigger salaries,” he said. IBRC should be able to make incentive payments to staff based around the recovery of debts and targets set on the sale of assets in an effort to retain staff, he said. About 250 staff had left the bank under a voluntary redundancy programme in 2009 and 2010, said Mr Dukes.

A further 350 people will leave the bank by the end of 2012 under another redundancy programme reducing the headcount at IBRC to about 800, he said.

He defended a remuneration package of €974,000, including a salary of €500,000, paid to IBRC chief executive Mike Aynsley for 2010, saying that it was approved by the Minister for Finance.

Mr Dukes said it was the policy of the Government and the troika of the EU Commission, the European Central Bank and the International Monetary Fund to pay all senior bonds falling due.

Mr Dukes said the bank would be paying a €1.25 billion senior unguaranteed unsecured bond falling due in January. Speaking on Newstalk radio yesterday, Mr Dukes said that it may be possible to wind down the IBRC, which includes the former Irish Nationwide Building Society within the 10-year timeframe.