IE
Which Irish bank is currently the most attractive to work for?
15 April 2010
In the current climate, it's not a question many people would like to be asked: Which of the domestic Irish banks would you rather work for?
It's a bit of a moot point anyway – all of the banks currently have hiring freezes in place. Nonetheless, despite the backlash directed towards NAMA, it could prove to be a turning point – good or bad - for the banks. So, it's really a question of which one will get on the road to recovery quickest (or shrink to a shadow of its former self).
Below is our considered opinion, ranked in order of desirability.
1. Bank of Ireland
Government stake: 16%
First tranche of loans transferred to NAMA: €1.93bn, bought at a 35% discount
Capital raising required: €2.7bn, the bulk of which will be raised through a €1.9bn rights issue.
Employment prospects: The official line, as has been the case for more than a year, is that a hiring freeze is in place. This has been an effective way of shrinking expenses – staff costs are down by €376m and over 1,000 employees have departed over the last 12 months. It's also frozen pay, curbed bonuses and has watered down its pension benefits, which doesn't exactly add to its appeal.
However, recruiters tell us that it's also hiring on a contract basis to fill some gaps, and could possibly be looking to fill compliance and risk roles in the not too distant future.
The bank also has so far avoided making redundancies in Ireland, instead choosing to run down its UK mortgage business and cease certain international corporate banking functions. Its fundraising plans have also had a positive affect – both on sentiment surrounding the bank and on its share price.
2. Allied Irish Bank
Government stake: 25% (but could increase)
First tranche of loans transferred to NAMA: €3.29bn, bought at a 43% discount
Capital raising required: €7.4bn
Employment prospects: Not great. At the moment it's off-loading assets in a bid to raise €7.4bn and avoid incurring a larger government stake. This is currently focused on selling operations in the UK, as well as other functions outside the Republic. However, by off-loading its First Trust branches in Northern Ireland, up to 1,300 jobs are at risk.
The regulator says it's a case of "wait and see" when it comes to increasing the state's stake in AIB. Over 1,600 jobs have gone at the bank, and while it remains tight-lipped about redundancies, neither its annual report or recent statements from Colm Doherty will reassure its employees.
Still, it received a vote of confidence from Goldman Sachs analysts, who said this week it would "emerge as smaller, yet more focused financial institution". Again, though, this doesn't sound great for jobs.
3. Irish Nationwide Building Society and EBS
Government stake: Possibly 40-60% in any merged entity
First tranche of loans transferred to NAMA: €670m (58% discount) and €137m (37%) respectively
Capital raising required: €2.6bn and €875m, respectively.
Employment prospects: OK, so the mooted merger between the building societies to create a 'third force' in banking hasn’t happened. In fact, the government will have full economic ownership of EBS and will look to either sell or merge Irish Nationwide as quickly as possible. The Sunday Independent suggested it might be an idea to let it fail as a 'test' to see how catastrophic it might be.
Job security is, of course, shaky. Assuming the original planned merger went ahead, there was the potential of 120 branches in Ireland closing. The outlook as yet though is unclear.
4. Anglo Irish Bank
Government stake: Fully nationalised
First tranche of loans transferred to NAMA: €10bn at a 50% discount
Capital raising required: €8.3bn (as an interim measure – another €10bn could be needed)
Employment prospects: On 1st April, Anglo had the dubious honour of posting the biggest loss in Irish corporate history – €12.7bn – but, sadly it was no joke.
The good news is that the financial regulator has discounted the possibility of winding up the bank because it would be "prohibitively expensive". It will, however, look to separate it into a good and bad bank, and then run down the bad part.
After the completion of its voluntary redundancy programme, which involved 130 job losses, staff numbers will stand at 1,300 – down from 1,777 in September 2008. Suffice to say, due to the ongoing restructuring, there's more pain to come.
