DAVID DUFFY, who was paid €425,000 in his last full year as chief executive of AIB, owed the bank more than €1.1m at the end of June, including €16,000 on overdrafts and credit cards.
The borrowings resulted in an interest bill of €4,000 for the first six months of this year, according to disclosures made in the lender’s interim results released this month.
The 53-year-old banker quit AIB at the end of May following the appointment of Bernard Byrne as his replacement.
Duffy left the bank to become chief executive of Scotland’s Clydesdale Bank. The move is likely to lead to a significant pay increase for Duffy, whose salary at AIB was capped at €500,000 under government restrictions for state-owned banks. His predecessor at Clydesdale received £955,000 (€1.3m) last year and £1.5m in 2013.
Duffy has struggled for several years to sell a trophy waterfront property on nine acres he owns in west Cork, halving the asking price from nearly €5m since the house went on the market in 2013.
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AIB’s interim report also shows the bank has set aside €59m to cover refunds to customers arising from mis-selling scandals in Ireland and the UK. This includes up to €7.2m for 110,000 Irish customers who were sold insurance costing €16 a year to cover unauthorised or fraudulent use of their credit cards, even though the bank was obliged to cover any losses free of charge.
The Central Bank of Ireland announced a redress scheme last week, under which AIB must contact customers who bought the insurance since 2006 and ask if they want to cancel cover and request a refund of premiums plus compensation.
The scheme relates to customers who purchased card protection insurance from Pinnacle Insurance (Cardif Pinnacle) through AIB.
The scheme is being put in place because an element of the card protection product — cover for unauthorised or fraudulent use — was not required, as customers were already covered for amounts greater than €75 under the terms and conditions of their credit card.
Other mis-selling scandals covered by the €59m provision include the sale of payment protection insurance to customers who could never have claimed successfully.
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AIB has also been embroiled in a scandal involving the sale of interest rate hedging products to small businesses in the UK.
The interim report states that most of lending to non-property sectors performed well in the first half, with the exception of the pub trade outside Dublin, central Cork and Galway, which was weak and continued to struggle.
Pubs account for 5% of the bank’s non-property lending portfolio.