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Final cost of IBRC is to be €25 billion

They were questioned on issues such as salary, hospitality policy and the final cost of the bank to the State (which it turns out will be a few billion less than estimated).

Pictured (LtoR) Chairman of IBRC and the former Anglo Irish Bank, Alan Dukes and Chief Executive Officer Mike Aynsley
Pictured (LtoR) Chairman of IBRC and the former Anglo Irish Bank, Alan Dukes and Chief Executive Officer Mike Aynsley
Image: Sam Boal/Photocall Ireland

IBRC EXECUTIVES HAVE said that the final cost of the bank to the State is hoped to be closer to €25 billion rather than the range of €29 – 34 billion estimated in 2010. However, IBRC chairman Alan Dukes said this figure is highly contingent on what happens to the property markets here and in the UK, as well as the economy and in the eurozone in general.

Dukes and other IBRC executives were grilled by members of an Oireachtas committee today.

The executives from the Irish Bank Resolution Corporation (the combined Anglo and Irish Nationwide) faced the Oireachtas committee on Finance, Public Expenditure and Reform, talking about the current operations and functions there.

The IBRC is winding down the bank over the next 10 years and is doing it in a sustainable, orderly way, he added.  Dukes said one of their concerns is to maintain the capital base of the bank, which would be in the interest of the shareholder.

He said that the IBRC have made some progress since nationalisation, but the task ahead is equally challenging.

Property Portfolio

The executives were questioned on their property portfolio, where they said that 40 per cent of the properties are in Ireland, and that they are acting as landlord to approximately 100 properties.

When it comes to rent reviews, Dukes said they take a ‘case by case approach’ and there isn’t a general rule, though in a few places they have ‘recast the relationship’, or given a rent reduction.

The IBRC will roll out what Aynsley called a “residential intensive care unit” designed to “care for the most needy” cases they are dealing with, in the next few months.

“We could sell the whole lot tomorrow if we didn’t have to worry about the price,” said Dukes of the bank’s loans, but added that he didn’t think this would be a good outcome for the State.

Salary

The executives were also questioned on their salaries, with CEO Mike Aynsley saying he has a base salary of €500,000, an allowance of €38,000 and a pension of €125,000. “Do you think it’s appropriate at a time when the country is bust that the State would pay out that type of money?” Sinn Féin’s Pearse Doherty asked.

Dukes said that the IBRC need to be sure they have people who are capable of doing the kind of job they need to do, and they have to pay the market rate. He also said that they are not paying people more than they need in order to retain them.

They also noted that their core staffing levels are below 800, with around 175 staff working direct to NAMA. Dukes said the NAMA unit works extremely well and NAMA has gradually delegated more and more of the decision making.

Michael McGrath asked about the hospitality policy of the IBRC, and was told by Aynsley that the bank has a full entertainment and travel policy in place. He also said that they maintain a situation where if a client is provided with entertainment, it is in certain circumstances and controlled under policy.

McGrath also asked about information that emerged during a High Court case in London, where it emerged that Aynsley had texted businessman Paddy McKillen. Aynsley said that there was nothing untoward about this, and that McKillen “doesn’t do email”, so this was the only way he could contact him when he wasn’t answering calls.

Read: IBRC and AIB executives to face Oireachtas committee>

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