AIB will deploy between 500 and 1,000 staff to help deal with the influx of new clients arising from the imminent exit of Ulster Bank and KBC Bank Ireland from the Irish market.
Chief Executive Colin Hunt said 300 of them would be redeployed internally, while the rest would be hired on a temporary basis.
Hunt said that the changes in the banking market represent a great opportunity for AIB.
“We have an opportunity here to welcome hundreds of thousands of new customers and I want to make sure and everyone who works at AIB wants to make sure that that process, that transition process from Ulster Bank or KBC to AIB is as free as possible from frictions”. he told the media following the bank’s general meeting and the release of a first-quarter business update.
“It’s a huge boost for the organization and I’m not going to try to underestimate the size of the boost, but we’re going to deploy the resources to make it as painless as possible because it’s a huge opportunity for us in the medium and long term.”
As many as a million Ulster Bank and KBC account holders will have to switch or close their accounts in the coming months, raising concerns about pressure on receiving banks.
Last week, the central bank warned all banks that they needed to do more to ensure customers who switch banks are catered for.
However, Hunt dismissed the suggestion that the industry has been slow to react and prepare for the massive movement of customers.
He said the banks have been thinking about it for quite some time, as has the regulator, and they are now in the “action part” of the process.
The bank has seen a very significant increase in account opening activity this year, he added, with around 84,000 new accounts opened during the first quarter of the year, compared to 210,000 for all of last year.
“So we’re already seeing that customer impact, we’re already seeing customers migrate to AIB and those numbers will inevitably increase as the year goes on,” he said.
The Competition and Consumer Protection Commission recently issued a warning about the impact Ulster Bank’s exit would have on broader competition in the banking market.
However, Hunt said there are fewer mortgage providers in the market now than there were in 2006 and 2007, yet rates are lower.
He added that there have been a number of rate cuts since the exit announcements by Ulster Bank and KBC, as well as a number of new entrants into the financial services market.
“There is a lot of competition in Irish financial services,” he said.
Referring to mounting pressure on the government to re-examine banker pay restrictions, Hunt said the bank has been operating under the restrictions for 10 years or more at this stage and is imposing a restriction.
“It limits our ability to compete in the job market, it has an impact on our ability to recruit, attract and retain staff,” he said.
Asked what it would mean for AIB if the Bank of Ireland removed its remuneration restrictions at the end of this year if the State’s shareholding in the bank were sold outright, Mr Hunt said it would be a big challenge for AIB in the labor market if a major competitor had flexibility in how people were paid that was of a different magnitude.
On the subject of AIB’s review of its EBS operations, Mr. Hunt said it is ongoing and will be completed next year.
He said that once it is complete, the bank will contact customers.
Hunt added that he is a very important part of the AIB group franchise.
AIB is currently in the process of negotiating a deal to buy around €6bn of Ulster Bank’s tracker mortgages.
Hunt said AIB’s aim had been to follow Ulster Bank’s track book once it announced it was leaving the Republic of Ireland market.
“It allows us to welcome a significant number of customers on a core product in our core market and that is why we engaged in a process with NatWest that led to last week’s announcement, and we are hopeful that we will conclude those negotiations in the not too distant future,” he said.
He said there would be no transfer of staff with the mortgage tracking book if negotiations are successful, something he said he hoped would be achieved before the first half of the year is out.
Previously, the General Meeting of Shareholders heard criticism from various shareholders about the bank’s customer services, including call waiting times and problems at branches.
One shareholder, Brendan Ryan, also criticized the bank’s handling of the fallout from the Belfry Funds bankruptcy and asked what progress had been made in paying compensation to those who lost money.
AIB Group General Counsel Helen Dooley said it had taken longer than anticipated to collect files, engage with stakeholders and work within the regulatory framework to design a remediation program.
He said all 2,500 investors would be considered for the program and are expected to be contacted by the bank before September.
Shareholder Brendan Burgess also criticized the bank’s handling of the tracker mortgage controversy, describing it as deeply disappointing.
He called on new chairman Jim Pettigrew to try to change the bank’s culture, adding that he hoped Ulster Bank’s new tracker clients would not be treated in the same way if AIB’s proposed deal to buy the book goes ahead. .
Pettigrew said he couldn’t comment on the past, but assured Burgess that customer service is absolutely at the heart of the organization.
Hunt said the bank is committed to solving the tracker issue once and for all and to the satisfaction of the Central Bank, hopefully this year.