While the share price holds, shareholders will be happy, writes SiobhanCreaton
The 200 or so shareholders who travelled to the AIB annual meeting in Belfast must be wondering why they bothered. If they thought they would learn something new about what went on at Allfirst or to challenge the directors on their stewardship of the bank, they must be disappointed.
The fractious two-hour meeting was neither a triumph for the board or the small group of dissident shareholders which continued to wage its nearly 12-year-war against the directors.
The only certainty to emerge was that the large investment institutions, which invest millions of their clients' pension and life assurance funds in AIB, are a contented lot. They overwhelmingly supported every resolution put to the meeting by the board. When it came to re-electing the directors retiring by rotation the votes revealed that in almost all cases the institutions were 99 per cent behind the current board and management of AIB.
During the past few months Irish and international fund managers have plainly told AIB group chief executive Mr Michael Buckley and his team what they expect in the future. Their chief concern relates to Allfirst, the business that despite the reassurances of AIB chairman, Mr Lochlann Quinn, has been badly damaged by the massive fraud.
AIB has indicated it still views Allfirst as a long-term investment suggesting it has the potential to be turned around and deliver profits for shareholders.
Mr Quinn apologised once again to shareholders and stressed the significance of the offer by himself and Mr Buckley to resign their positions in response to the fraud.
One shareholder asked if they could hear an account of the reasons why the board had refused to let the two men leave the bank. He wondered if AIB's deputy chairman, Mr John McGuckian, who chaired that meeting could talk to them. Mr McGuckian was present but was not invited to explain. The chairman said Mr McGuckian had told him the board did not deem it appropriate for the two men to resign.
Mr Quinn also played down the $2.9 million (€3.1 million) payment to Mr Frank Bramble, the former head of its US operations, upon his retirement last month. Mr Quinn said the money was due to him under his pension arrangement with the bank. Mr Bramble had been chief executive of Allfirst for most of the five years during which the fraud occurred.
Questions about AIB's outgoing auditors, PricewaterhouseCoopers, were unanswered with the chairman citing confidentiality for his inability to respond to the query.
The bank had done much to quell shareholder anger in recent months. Senior executives had their bonuses cancelled, shareholders were paid a dividend and the share price is now higher than it was before the fraud was announced on February 6th.
One shareholder noted that in other years, the entire 13 members of the board of AIB sat at the top table to face shareholders but this year just three: Mr Buckley, Mr Quinn and head of finance, Mr Gary Kennedy, were in the direct line of fire.
AIB will be happy to have the a.g.m. out of the way for another year, safe in the knowledge that shareholders will remain mellow as long as the share price stays strong.
