TWO OUT of three second-tier managers who worked for Allied Irish Bank when the banking crisis struck in 2008 are still working for the lender, the bank has said in a letter to an Oireachtas committee.
AIB said that of the 57 most senior people at the bank in September 2008 below the lender’s nine-strong executive committee, 20 have left and a further 24 have changed roles or responsibilities.
Of the nine members of the executive committee in place in September 200,8 seven had left the bank while the remaining two had changed roles, AIB told the Oireachtas Committee on Finance, Public Expenditure and Reform.
The bank said in a letter to the committee that all 16 board members who were in place in September 2008 had left AIB.
The letter was sent to answer queries raised by TDs and senators during an appearance by AIB executive chairman David Hodgkinson at the committee on September 14th when the information was not at hand to the bank at the time.
The largest amount of consultancy work being provided to the bank was by the accountancy firm PricewaterhouseCoopers for work in the restructuring of the bank, AIB said in its letter.
The bank was unable to tell the committee how much it was paying the accountancy firm.
“While the final cost of that ongoing work has not been determined, we are progressively managing down the requirement for these services,” AIB said.
The bank has 37 consultants from PwC working at the bank but expected to reduce this to about 12 by the end of the year.
In response to the query about fees paid to consultants, AIB said that the largest amount paid by the bank was €11.8 million to investment bank Morgan Stanley on the sale of its Polish businesses.
AIB disclosed to the committee that it had written off about €600,000 in mortgage debt this year, mostly in the first six months.
The bank said that mortgage write-offs “have only occurred in exceptional circumstances”.
The committee was told at the hearing that AIB had only written off mortgage debts in a small number of cases where it had repossessed houses.
The bank said it had repossessed 17 owner-occupied and 21 buy-to-let properties.
The bank said in its letter than it awaited proposed solutions from the Department of Finance and a Government-appointed interdepartmental group on “an industry-wide approach to solving long-term mortgage debt problems”.
AIB said that historically mortgages represented about 5 per cent of the bank’s group profits.
The overall cost of funding the bank’s assets, including mortgages, was 1.6 to 1.85 percentage points above the European Central Bank base rate or the inter-bank borrowing rate of 1.5 per cent, the bank told the committee.
In response to queries about AIB’s lending to the agricultural sector, the bank said that the average interest rate charged to customers on loans to finance farm machinery was 8.27 per cent.
The average rate charged to finance the purchase of tractors, which accounts for almost half of the overall “agri finance book”, was 7.95 per cent, the bank said.
