THE full extent of AIB’s recklessness became apparent last night when it was revealed that its own staff owe the bank more than €3billion.
Just over €2.5billion of the huge figure is made up of mortgages and home-related loans, while at least €500million consists of other types of credit from their employer.
Shocking as the figures are, bank sources have admitted the sums involved could be even BIGGER.
And as AIB considers redundancies to reduce its costs, the exercise could prove futile, if not impossible, with so much debt tied up with its employees.
One AIB insider last night claimed that around 1,000 employees – out of a total of 12,000 – account for an astonishing €1billion in unpaid mortgage debt.
Some staff on salaries of less than €35,000 reportedly have debts of more than €500,000, thanks to the bank’s profligacy during the boom.
Another employee said: ‘As a member of staff, you were entitled to an almost automatic €20,000 a loan gold credit card, car loans, home improvement loans, overdrafts and, of course, a mortgage.’
The revelations are bound to fuel anger among taxpayers already incensed at being saddled with a €3.7billion bailout over and above the €3.5billion the bank received in public funds in May.
Speculation about the true state of the bank’s finances was raised to new heights last week when Finance Minister Brian Lenihan used the powers vested in him under the Credit Institutions (Stabilisation) Act in making his application to the High Court for the controversial €3.7billion cash injection.
The provision allowed him to exclude the media from the hearing, effectively screening the bank’s massive problems from the public which, some critics believe, is simply being asked once again to throw good money after bad.
Pressure on bank finances has intensified this month after it made a loss of €5.5billion in the sale of €9.3billion of propery development loans to the National Asset Mangement Agency at a 59 per cent discount.
Meanwhile, staff last night alleged that in addition to their perks, they were able to secure further credit from their branch, which would be unaware of what individual employees had received at staff level because of the way separate departments within the bank worked.
Last night, an AIB spokesman said: ‘We cannot comment on staff mortgages or other loans.
‘Staff who are customers are treated the same as non-staff customers.’
But with the bank still needing to raise a further €6.1billion by next February, the fact that such a large chunk of its debt is staff-related will shock many.
And it could prove to be crucial when the Department of Finance and AIB chiefs meet early next year to finalise details of the much-publicised redundancies at the bank.
The December 23 bailout by Mr Lenihan effectively nationalised the bank, in which the State initially has a 49.9 per cent control until the sale of AIB’s stake in Poland’s Bank Zachodni WBK.
Once the deal is completed, the State will end up with 92.8 per cent of the bank, which is to de-list from the main markets of both the Irish and
the British stock exchanges.
With AIB’s mortgage book valued at €27.1billion, insiders at AIB say staff exposure would be ‘in the region of seven to ten per cent’.
One AIB staffer said of the boom times last night: ‘You could pretty much have whatever you wanted. There were few checks done and many of us were able to get multiple mortgages, multiple car loans as well as personal loans.
‘It’s all been tightened up now but people have no idea just how much cash was swilling around in the good times.’
One of the perks the bank admitted to last year was the availability of 100 per cent mortgages for staff members who were first-time buyers.
The mortgages – condemned by TDs as inappropriate at a time of growing economic uncertainty – were being offered as part of a ‘special package to staff ‘.
UCD economist Morgan Kelly has warned that Irish banks could end up ‘drowned’ by the losses on mortgages.
Bank workers’ union the IBOA is so concerned about the increasing ‘anecdotal’ evidence of its members’ debts that it ordered a survey earlier this month.
The Financial Regulator has received a number of complaints about the way the bank is dealing with staff debt.
An anonymous AIB whistleblower has lodged complaints with both the regulator and the Department of Finance, and a string of serious allegations are now being investigated.
They include a claim that staff have been allowed to have mortgages more than 20 times their salary.
An IBOA spokesman said: ‘We are very concerned and feel it’s now time to get a better assessment of the problem.’