Below is the full text of Colm Doherty's letter to AIB staff
Dear Colleague,
I promised to write to you about my strategy for AIB and today I can
give you more details of my 1,000 day plan for the group.
As you know, AIB is in a difficult place right now and the past 18
months have been particularly challenging for all of us.
While some of our problems are due to the global financial turmoil, the
reality is that most of them are self-inflicted. The support of the
Irish Government and of the taxpayer has been very important in helping
us deal with the unprecedented events that have challenged the very
survival of our business. I want to put on record AIB's gratitude for
this support from the Government and the taxpayer.
As your new Group MD, I realise AIB's credibility as a financial
institution has been seriously affected by recent events. AIB's
reputation and standing in the eyes of our customers and the public at
large have been badly damaged. Many of you, especially people working in
front line roles, have experienced first hand the wrath of our
customers, family and friends about the failings of AIB. It is a source
of deep regret for me that this is happening as I know the vast majority
of staff are entirely blameless for the current problems.
Unfortunately we can't change the past but we must do everything we can
to stop history repeating itself. We must rebuild trust and confidence
in AIB. Today I want to outline how we can repair the damage and how we
will get ourselves out of the crisis we are in. We can only do this by
working together.
My aim is to restore our viability and credibility in the next '1000'
days. My overarching strategy sees AIB as a customer and people led
organisation. In time, this approach will have a significant impact, not
only on our culture but also on the bottom line of the group.
So what are the top priorities? Firstly, our business. We must get back
to basics by looking after our customers because without them we won't
have a business. That means taking deposits, lending prudently and
providing an efficient and effective customer service. We want to ensure
our products are priced fairly, both for the bank and the customer.
We have a real role to play in helping our customers survive the
downturn and get themselves in the right shape for economic revival. We
will keep doing what we can to help customers in trouble, although,
inevitably, this may not be possible in all cases.
Secondly, re-organising our credit and risk functions is crucial.
Historically, AIB was one of the best credit institutions, but somewhere
we lost our way. Our credit & risk infrastructure, policies, and
practices need to be integrated so that we can identify and manage risk
in a timely and effective way.
Thirdly, our culture is under scrutiny. We all need to take
responsibility for everything we do. In particular, I expect management
to step up to their responsibilities and to be accountable for their
actions and those of their staff.
AIB's ethical and business policies are readily available and easy to
understand. We all know what is right and wrong and the spirit is as
important as the letter. I want to make it clear that in relation to
breaches of these policies, I will have zero tolerance.
Finally, we also need to look at improving our key external
relationships. We need to work with all our stakeholders, particularly
the State, to show that we have a well managed, viable business that is
worthy of their respect and that is contributing fully to the economic
well being of the country. In this regard, I fully acknowledge the
central role AIB has to play in Ireland's economic recovery.
'1000' Day Plan
My goal is to restore AIB to the fine organisation it was in the past.
To keep us all on track, I will be setting objectives for myself and my
management team every 100 days. My first set of objectives are set out
below. By mid-March we need to make real progress on:
1. Appointing a new management team.
2. Delivering NAMA.
3. Re-organising our credit and risk functions.
4. Delivering the EU restructuring plan.
5. Developing capital initiatives.
6. Improving our focus on the day-to-day delivery of customer service.
At the end of every 100 day period, I will let you know what progress we
have made and I will then set objectives for the next period.
I will do my best to ensure that whenever there is an important
communication to be made, you will hear it from me first. As part of
this plan, there will be a new communication framework put in place
early in the New Year. Each executive and line manager will brief you in
detail on how you can play your part in the '1,000' day plan.
We need to understand that as a consequence of our property loans moving
to NAMA, and the potential, but as yet unknown, impact of the EU
Restructuring plan, AIB will be a smaller group in the future.
I am particularly conscious that people are concerned about their
careers and job security. However, our current costs are too high for
the level of revenue we expect to generate. We have already reduced our
workforce by 1,500 this year through natural attrition and tough
decisions are needed to further reduce our costs.
We need to restructure the business. I have to tell you now that there
can be no pay increases in 2010. In addition, we will consider all other
options to further reduce our costs. Where appropriate, I will consult
with all key stakeholders to ensure we make these savings in a fair and
balanced way as part of a process which must be completed in a clearly
defined time period.
I want you to understand the scale of the challenge we face. The
economic downturn is unprecedented - but it will not last forever. AIB
has taken a real battering but it fundamentally remains intact. We have
a great franchise and we have resilient and committed people. We now
need to rebuild our reputation and our business, brick by brick. This
will take time. It won't happen overnight. To do this we need to be very
focused, take timely decisions and act with urgency.
I am determined to do everything possible to shape our own future and to
restore your pride and confidence in AIB. I need your help, commitment
and energy as we must do this together as one team.
In the New Year, I hope to meet as many of you as possible to explain my
strategy and plans for AIB more fully and to listen to your views. Until
then, you can send me your feedback at the addresses below.
Thank you for your continued effort and support.
Colm Doherty
Group MD, AIB Group