Restructuring commitments contained in a new pay deal for AIB staff represent another “incremental step” towards the bank’s return to private ownership, according to a leading analyst.
Ronan Dunphy, an equity analyst at Investec Ireland, said thata commitment from the Financial Services Union to engage with AIB on forthcoming restructuring was a positive step for the bank.
The union has recommended that its members accept a new two-year pay deal facilitated by the Workplace Relations Commission, which will result in an average 2.75 per cent rise in salaries. It has also extended job security commitments until 2019, which means that there will be no compulsory redundancies during that period.
In return the union has committed to engaging fully with the AIB restructuring measures that are expected in the coming years.
Billy Barrett, a senior industrial relations officer with the FSU, said that the job security commitments were an important achievement for its members.
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“Importantly, the deal will copper-fasten job security and existing redeployment arrangements previously negotiated by FSU until the end of 2019,” Mr Barrett said. “These securities have been important for AIB staff in recent years as the bank emerged from the turmoil of the financial crash and it is vital that they are locked down into the future. This deal achieves that.”
An AIB spokeswoman said that the bank had been in discussions with the union over the past few months and had accepted the recommendation put forward by the commission.
Mr Dunphy said that the pay deal, along with comments by Michael Noonan earlier in the week, were positive developments in AIB’s return to private ownership.
The finance minister said that the state would seek to sell a stake in the bank, believed to be 25 per cent, in either May or June of this year or in the autumn.
In December Mr Noonan appointed three advisory firms to assist with the sales process, but stressed that their appointment did not mean that there was any obligation on the state to offload part of its 99.8 per cent shareholding at any particular time.
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“The indicators are positive. It would still be dependent on market conditions as the year progresses, but those couple of things are definitely incremental positives,” Mr Dunphy said.
Earlier this month AIB confirmed to the Oireachtas finance committee that the number of its customers overcharged as a result of being moved off a tracker mortgage rate or charged an incorrect tracker rate had grown to more than 3,000. It had previously disclosed that it knew of about 2,600 affected customers.
Mr Dunphy said that the growth in the number of affected borrowers would not impinge on the potential flotation.
He added: “From what we’ve seen at the moment I don’t think we’d feel that that would be a hindrance.”