McDonagh is again pushing for the lifting of banker salary caps as she prepares for Bank of Ireland’s departure


LEAVE Bank of Ireland boss Francesca McDonagh has fired a farewell shot criticizing bankers’ salary caps before taking on a more lucrative job in Switzerland.

s McDonagh, who will move into a senior position at Credit Suisse in two months, said yesterday that caps on bankers’ pay and a ban on bonuses for Bank of Ireland employees “should be lifted”.

She said the bank had submitted a submission to the Treasury Department’s Retail Banking Review calling for the salary cap to be removed.

A key message in the filing was that Bank of Ireland would be fully privatized by the end of the year and had repaid €6.5 billion to the state since its €4.8 billion bailout in 2011.

“It’s not just for high-paying roles like CEO or CFO,” said Ms. McDonagh. “It is also for the 9,000 colleagues in the bank. We cannot adequately reward excellence or incorporate new achievements into compensation packages.”

She said the salary caps, which keep salaries below €500,000 and don’t allow bonuses to be paid, meant the bank has struggled to compete for talent with unrestricted companies in other sectors.

Bank of Ireland has lost senior executives to higher-paying jobs in CRH and Musgrave in recent years, prompting criticism of the bank’s salary caps.

Ms McDonagh’s comments came as Bank of Ireland reported underlying profit of 419 million euros for the first half, compared with 465 million euros for the same period in 2021.

The total income for the first half of the year is also “slightly higher” than in the same period of the previous year. Business revenue increased 16 percent compared to the first half of 2021, driven by the recovery from the pandemic.

The bank’s new lending increased by 7 percent compared to the same period last year. However, UK retail lending fell 19 per cent on the back of a reduction in mortgages and a “strategic focus on value over volume”.

The group’s costs increased by 1 percent in the first half of 2022 compared to the first half of 2021. Costs are 1 percent lower excluding the purchase of Davy and one-off investments after other banks plan to exit, it said.

Meanwhile, customer lending volume was €74.6 billion at the end of June, down €1.7 billion from the volume recorded in December 2021.

The bank’s loan book grew by €1 billion on a constant currency basis, excluding the €2 billion planned UK deleveraging and a €100 million bad loan transaction.

The bank will appoint an interim CEO. McDonagh is again pushing for the lifting of banker salary caps as she prepares for Bank of Ireland’s departure

Fry Electronics Team

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