BANKS SHOULD cut back on executive perks before they raise interest rates for home owners, a Fine Gael TD has said after it emerged AIB was paying annual gym memberships and golf club fees as a benefit to staff members.
Fine Gael front bench spokesman Leo Varadkar said: I certainly don’t begrudge employees of the bank any benefits they may have. However, this practice is reflective of the culture at AIB and many of the other banks, and that’s the culture of a big bank that still thinks it’s in the Celtic Tiger-era.”
He was reacting to the details of an AIB scheme under which staff can claim for membership for sports and social club fees of up to €2,500 annually.
Noting that details of the perks scheme came as the bank announced a mortgage hike for about 50,000 standard variable rate customers, Mr Varadkar said that there were many areas in which the banks could cut back before passing over the cost to mortgage holders.
“Banks have lots of buildings, lots of cars, lots of offices, lots of big salaries and lots of benefits and these are the things that need to be cut back before they increase interest rates on ordinary mortgage holders,” he said.
An AIB spokeswoman said last night that the staff scheme was under review as part of general cost-cutting measures.
Under the scheme staff are entitled to claim reimbursement of one sports and social club subscription for single membership in any one year. The amounts vary from half to full reimbursement of the fee with an upper limit of €2,500. Staff members must pay full tax on all of these payments and this is deducted through the bank’s payroll system.
AIB, one of six banks which come under the Government bank guarantee scheme, announced on Monday that its standard variable mortgage rate was to increase by 0.5 per cent to 3.25 per cent. The announcement came days after the bank recorded pretax losses of just over €2 billion for the first half of 2010.