The Irish Bank Officials’ Organisation (IBOA) has today warned thousands of jobs could be at risk due to restructuring of the financial services sector following the creation of the National Asset Management Agency (Nama).
In a statement today, the union said it was seeking clarification from the Government on the likely impact of the creation of the body on the jobs of its 23,000 members in the sector.
"Once the transfer of toxic assets from the financial institutions to Nama gets under way, it opens up the possibility for a major consolidation of the sector through mergers, acquisitions or closures,” said IBOA general secretary Larry Broderick.
“The Minister for Finance already has significant powers in this regard under the legislation which extended the State guarantee last September. The draft legislation on Nama published last week confers additional powers on the Minister - which could greatly facilitate the consolidation process.
“We recognise that some reconfiguration of the financial services sector may be necessary after these toxic assets have been removed from the balance sheets of these institutions. However, IBOA is concerned that consolidation could be used as a pretext by senior managements to pursue an opportunistic cost-cutting agenda putting thousands of jobs at risk," Mr Broderick said.
He said 750 jobs in the Ulster Bank Group were being "sacrificed" because of the "reckless policies" pursued by senior management at the bank's parent company, RBS. "We are concerned that other institutions may be lining up to follow suit - either through further job cuts or through attacks on our members’ terms and conditions,” Mr Broderick said.
“Our members did not precipitate the culture of greed which is at the heart of the crisis. . . . But ordinary bank staff could now be scapegoated by the same management philosophy which was behind the current crisis, unless the Government takes specific steps to prevent it.
"We urge the Minister for Finance to ensure that the banking sector operates in the longer-term public interest rather than continue the short-sighted approach which created the crisis. In particular, we would ask the Minister to move quickly to address the need to change the culture of banking and to ensure that the boards of financial institutions are recast in order to promote this change," he said.
The IBOA said it is seeking further talks with the Department of Finance, Nama, the Financial Regulator and the Central Bank.
Charged with the management of 10,000 loans worth €90 billion, Nama will be able to transfer, assign or sell property secured by the loans. It will also be able to borrow money to fund developments
Legislation published recently to set up Nama gives it sweeping powers to intervene in the property market, limits the scope of any legal challenges to its work and accords a prime role to the Minister for Finance in any dispute over asset valuation.
The new agency expects to start acquiring the loans from banks and building societies next October and to complete this work by mid-2010.
