herald

Saturday 16 December 2017

Fury at Anglo pay hike amid losses of €15bn

STATE-owned Anglo Irish Bank has been heavily criticised for awarding pay hikes to 70 staff.

The scandal-hit lender implemented the rises despite being expected to announce €15bn in losses -- the highest ever in Irish corporate history.

It gave pay hikes to 40 of the bank's 800 staff in Ireland, 20 out of 370 staff in the UK and 10 out of 80 staff in the US.

The increases were awarded in cases where jobs changed following the voluntary redundancy plan under which 230 staff left the bank.

Labour's finance spokeswoman Joan Burton wondered how employees at a bank which has "in effect helped to bankrupt this country" could be in line for rises. She said the banks have come "roaring back with bonuses and very large salaries while Main Street, the real economy, continues to suffer".

Ms Burton said Anglo "is doing no ordinary banking business" and "is, in effect, a zombie bank". "I suspect an awful lot of taxpayers will pull their hair out at this," the Labour TD said.

The Department of Finance said pay increases are not a matter for Finance Minister Brian Lenihan. It said Mr Lenihan only had influence over the general pay scales applied to senior management and directors at Anglo Irish Bank.

Newly appointed Minister for Community, Equality and Gaeltacht Affairs Pat Carey defended the hikes. He said the increases involved a small number of non-senior specialist staff in England that had been recruited on a contract basis.

Mr Carey said it would not be possible to clean up the bank without the specialist staff. He added that the chairman of the bank and members of the board were "satisfied that these particular staff are necessary".

Alan Dukes, the chairman-designate of Anglo and a former Fine Gael leader, denied the salary increases were pay hikes.

"The people concerned here are, by a majority people, who have taken on extra responsibilities and are being paid the rates for the jobs," he said.

Anglo argued that, before its nationalisation in January last year, the pay for a substantial proportion of staff was bonus-related. This was no longer the case and as a result average take-home pay has been "substantially reduced".

"Increases were awarded where roles and responsibilities have changed since the completion of the voluntary redundancy programme," the bank said.

The bank has declined to reveal the scale of the hikes but said in its statement to RTE's Prime Time that the increases would be "modest".

Taxpayers are expected to have to stump up a further €6bn as another capital injection into Anglo.

The Government injected €4bn into Anglo last year after half-year losses of €4.1bn for the six months to the end of March 2009 obliterated the bank's existing capital reserves.

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