Blog 01

The chairman of the bank has stated that the European banking authority guidelines should replace the current guidelines on remuneration in Ireland. Chairman Kennedy says that his bans and pay cap on variable pay are not seen in any of the markets they are involved in.

"They create an uneven playing field between the bank and other corporates, both banking corporates and non-banking corporates, with whom we compete for talent," said Kennedy in the annual meeting in Dublin.

Kennedy continues to say that these restrictions were enacted in response to the financial crisis in Dublin. Which occurred nearly a decade ago. "As the state sells down its remaining shareholding and Bank of Ireland returns fully to private ownership, our view is that the crisis-era restrictions should be replaced by these EBA guidelines," he added.

Kennedy believes this gives Ireland the ability to operate on the same playing field as other European norms. Rather than look to rebuild and play the safe route, meet the high-risk culture and management standards.

This transition coming around the same time as the movement away from CEO Francesca McDonagh. Mcdonagh is now preparing for a new role with Credit Suisse after her 5 years with the BoI (Bank of Ireland).

Also announced in the annual meeting, Kennedy proclaimed that the bank will return to sole private ownership by the end of the year. The state has yet to sell down the remaining 4% shareholding, once this is done steps can be made to move forward.

"This is a positive step – a positive step for Irish taxpayers, it is a positive step for the Irish economy and it is a positive step for Bank of Ireland," he claimed.

Kennedy said the bank is special in being the singular bank to repay their debts and interest included back to the state. After being saved by the state a decade ago, the amounts owed are nearly 2 billion euros more than the initial loan received. When looking back on the steep challenges encountered in response to Covid. Kennedy believes that the Bank of Ireland has made strides in advancement in a multitude of areas.

"Specifically the group continued to improve our technology offering to customers…we made strong continued progress in delivering the turnaround of our UK business, we materially restructured our branch network in the Republic of Ireland and in Northern Ireland, we exceeded the global financial services benchmark for culture for the second year running, and we reduced our cost base by a further 4%," said Kennedy.

The bank's subjugation of capital markets and some wealth divisions of the Davy group have recently been approved by regulators. It is said that the full acquisition will occur in a few weeks time.

Mcdonagh expressed to shareholders that the bank has moved its attention to aiding customers from Ulster Bank and KBC who are in search of new banking providers.

Mcdonagh went on to reiterate the drastic change in the banking market with the exit of two big providers. “we recognize that some customers will find moving accounts challenging,” said Mcdonagh.

Thus the bank has put in a range of support for customers during this transition. Consists of added personnel, genuine customer service, and an informative campaign.

Seventy percent of new accounts are created online, with an estimated turnaround of three days. While those opened with a branch expect a turnaround of at most 5 days.

When addressing complaints Mcdonagh states that less than one percent refer to new accounts being opened. 

She also said that the bank intends to remain active in response to the ever-changing geopolitical situation arising from Russia's invasion of Ukraine.

Kennedy said that the net interest income is catered to the developing interest rate environment. He said that the increased market expectations of higher interest rates may provide an additional spur of revenue.

Pat Clerkin a shareholder proposed a question. Whether or not the bank would accept making a 3,000 euro donation to community groups in each of the 88 towns affected by the closing.

An additional shareholder proposed what the bank is doing to make certain that staff are not under additional stress as a result of the surge of new customers from KBC and Ulster Bank.

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