Shareholders took to the floor in their numbers to bemoan collapse of investments

WHILE THERE may have been no eggs thrown, there were nonetheless some heated moments at AIB’s annual general meeting yesterday, as shareholders availed of the opportunity to vent their frustration with the bank’s board of directors.

Shareholders took to the floor in their numbers to bemoan the collapse of their investments and to question the direction the bank was taking.

There were some familiar faces at the event. Niall Murphy generated some laughs as he gave a prepared speech and argued that “executives are whooping it up on a spending spree”.

He also questioned whether or not the bank would be able to pay back the Government its investment. “It’s all a con – there will be no money returned before Christmas,” he said.

For his part, David Hodgkinson replied that the bank was “very keen to get new investors into the bank, but it’s not an investable proposition yet”.

“We are engaging with investors but we think it’s better to defer till we get a better deal,” he added.

One of the common threads at the meeting was the apparent reluctance of AIB board members to buy shares in the bank.

While Hodgkinson asserted that directors of the bank are not obliged to maintain a shareholding in the bank, those in the crowd were nonetheless surprised that just one director, Michael Somers, has AIB shares.

As of the end of last year, he held 13,437 shares in the bank, at a value of about €940.59.

The company secretary, David O’Callaghan, has 8,120 shares which come to a value of about €568.40. This is a far cry from 2007 when all but one director had a shareholding in the bank.

Given the problems faced by Ulster Bank as a result of a technological meltdown at its parent Royal Bank of Scotland, Hodgkinson was also questioned about AIB’s strategy in this regard. He said that the bank’s IT systems were reviewed by a third party last year and the legacy system, while old, was found to be robust.

“Recent events clearly gave us a reminder that we need to examine the effectiveness of the system,” he said, adding that AIB had provided “significant support” to Ulster Bank in processing its transactions.

Hodgkinson also indicated that both Jim O’Hara and Simon Ball are responsible for the bank’s IT strategy at board level and that the bank is “investing significantly” in upgrading its networks. Of a proposed plan to move loss-making trackers into Irish Banking Resolution Corporation, the chairman said “anything that could be done to ameliorate that performance would be welcome”.

When questioned as to whether or not AIB has any contingency plans in place should the euro collapse, Hodgkinson said it would be “inappropriate to speculate on what might happen”.