BOI Apologises Over 'Misleading' Bonuses Claims

The Bank of Ireland has issued an apology over the "quality" of its information on bonuses to the Government, which the department of Finance has called "misleading".

The apology comes after an investigation by the Department of Finance, published on Friday morning, which found the bank had paid bonuses totalling almost €66.4m despite claims that no performance-related bonuses were being paid to its senior staff.

In December of last year, the then Finance Minister Brian Lenihan told the Dáil no performance related bonus had been paid last year by the bailed out Bank, based on information from senior executives.

However, the Finance Department said the report on payment of bonuses found that the information from the bank was inaccurate "in multiple points". It said the information was incomplete and misleading and it described the discrepancy as “unacceptable”.

The report also found that senior executives were paid bonuses amounting to €4.3 million over the period; that the bank is due to pay €0.6 million to executive members in 2011 and a further €0.2 million in 2012; and that payments of up to €11 million may still be payable to up to 250 staff.

A spokesman for the Department of Finance said: "The Banks says these figures remain under review and have been revised downward. The Government recently introduced a 90% tax on bank bonuses in the Finance Bill, which will apply to any future bonuses paid by Bank of Ireland or any institution while in receipt of State support."

The report recommended that any future support for Bank of Ireland must be conditional on compliance with Government policy and that the conditions on any potential future state help to the bank was a matter for the incoming Government.

In its apology this morning, the Bank of Ireland claimed that the "complexity" involved in finding out whether it was paying its own staff bonuses "led to errors" and that the term “performance bonus” was "open to different interpretations" leading to "confusion".

However the banks statement said it had agreed to make a payment of €2 million to the State to "recognise the difficulties caused by the way the Bank handled this matter".

Responding to the revelations, Labour's Finance Spokesperson Joan Burton said the findings of the investigation were "truly shocking" and show that little has changed in the culture in the banks that contributed much to the current economic crisis.

"The reference in the report to ‘misleading information’ being provided by the Bank of Ireland is simply a polite way of saying that the government and the public were lied to," Ms Burton said.

She added: "I was among those misled by the misinformation given by the Bank of Ireland. For instance, in reply to a parliamentary question on December 16th last, the Minister set out bonuses totalling nearly €40m paid by the guaranteed institutions since 30th September 2008. The sums recorded for Bank of Ireland were nil.

Ms Burton said the offer by the Bank to pay €2m to the Exchequer "in recompense for misleading the Minister and Oireachtas" would be cold comfort to taxpayers as the taxpayers themselves will end up paying a large part of this by virtue of the public holding in Bank of Ireland.

(DW)