AIB has agreed a voluntary redundancy package that will cut 250 staff in Britain and Ireland and cost the bank a reported €26 million.
In a deal arbitrated by Mr Phil Flynn, AIB and the Irish Bank Officials' Association (IBOA) have agreed a voluntary redundancy deal for staff aged 50 years and over at the end of next April.
It provides for a one-off payment of €17,000, the payment of a service-related lump sum of up to one year's salary and a €10,000 grant for children in full-time education to employees who take it up.
Their pension entitlements will be based on a 5 per cent increase in their salaries, along with any increases and bonuses to which they will be entitled this year.
It will apply to 203 staff in the Republic, around 40 in First Trust in Northern Ireland and a number of Irish staff in its British operation.
One source yesterday said it would cost AIB an initial €26 million, but a spokeswoman said it would not be possible to calculate the cost until the scheme was taken up.
Meanwhile, sources at AIB poured cold water on reports that the group was in talks with Dutch bank ING over the merger of their Polish operations.
According to the Warsaw daily newspaper Parklet, the two are discussing a merger that would create the third-largest bank in Poland, with assets of $14.1 billion (€11 billion) and 2.2 million clients.
AIB said it would not comment on speculation but sources said the report was inaccurate.
There has been growing speculation that AIB is seeking a merger, after profits at its Bank Zachodni WBK subsidiary slid 33 per cent to €11 million in 2002. In July, the group announced plans to cut its Polish workforce by 10 per cent.
In the wake of yesterday's reports, Davy Research said AIB should embark on a "double or quits" strategy: either building on its Polish presence with further acquisitions or withdrawing from the country completely.
