Government to review ban on bonuses at bailed-out banks

The Finance Minister is establishing a review of banking pay practices

Government to review ban on bonuses at bailed-out banks

The Minister for Finance Paschal Donohoe, 17-04-2018. Image: Sam Boal/RollingNews

Bankers could be about to get their bonuses back for the first time since the crash.

A new review will look at whether salary caps should be relaxed for those working at bailed-out lenders, while also considering the return of bonuses.

The review comes a decade after the sector was bailed out by the taxpayer.

The push for looser pay regulations is on the agenda at the annual general meetings of both AIB and Bank of Ireland in the coming days.

The Finance Minister is expected to block a return to bonuses at AIB until the Government review is complete.

However, Newstalk's business editor Vincent Wall says AIB is trying to find a way around it.

"It might issue shares in the bank to a limited number of key executives that, it believes, it might have difficulty in retaining their services because they might move to banks where this bonus ban doesn't apply," he said.

"Now the shares, if they were issued, could only be cashed in when the full €21bn invested by the taxpayer is repaid."

The Government holds a smaller stake in Bank of Ireland and as such does not hold a veto.

On The Pat Kenny Show this morning, Paschal Donohoe said the rules will not be changing - for now:

"That means there is a cap on compensation; it means there are no bonuses; there is restriction on any kind of fees," he said.

"That is policy now and I will be voting at the different banking AGMs to implement that policy."

He admitted however that the "context for banking in Ireland is going to change into the future."

"Particularly as we have more banks located here in Ireland that are not subject to the banking cap as we move into a post-Brexit world," he said.

"So it is something that can be looked at into the future."