National Irish Bank has clearly decided that now is the time to start putting the past behind it. Last week the bank began a process aimed at getting across to the public the lengths that it has gone to make sure that it does not make the same mistakes again.
The timing is interesting. Ms Beverley Cooper-Flynn TD's mammoth libel action against RTE finished last month. Although she may appeal on a point of law or over the costs, no new dirty laundry is likely to be hung out on the line.
In January the bank moved to head off prolonged and messy legal actions from the 476 people sold offshore investment bonds by Ms Cooper-Flynn and her colleagues. Many of the customers have claimed that they did not know the policies were subject to capital gains tax and that the commissions were not explained to them. The bank has offered to pay the capital gains portion of any settlement reached with the Revenue Commissioners by the customers. Some 20 settlements totalling £400,000 (€507,895) have been approved, of which five, worth £100,000, have been accepted.
The bank is hopeful this initiative and the ending of the Cooper-Flynn trail will bring closure to the offshore bond issue.
In addition, £1.5 million has been refunded to customers who were overcharged by the bank. Almost 3,000 customers rang a help line and asked for the charges on their account to be checked. This led to the review of 5,000 accounts and - the bank believes - an end to this problem.
NIB is also hopeful that the DIRT scandal is behind it. A settlement of £5.25 million has been made in respect of the years 1986 to 1999 and the bank is at the forefront of institutions trying to settle with the Revenue Commissioners for the years from 1999 to date. By June this year the bank says it will have audited every single non-resident account on its books to establish which ones are genuine and thus be rid of the problem forever.
The only remaining blot on the landscape - from NIB's perspective - is the ongoing inquiry by two High Court inspectors into the bank's activities. Mr Tom Grace of PricewaterhouseCoopers and the retired judge, Mr Justice John Blaney, are understood to be writing up their report, which may be completed before the summer.
The publication of the report will once again shine the spotlight on NIB and its appalling record of stealing from its customers and facilitating - when not actually encouraging - tax evasion. The inspectors' report will also shed light on the culture of greed that existed at the bank in 1990 when these events took place. Any attempt by NIB to explain the measures it has taken to put its house in order will be lost in the noise surrounding the report. The bank has obviously decided to get its retaliation in first.
SO. What has National Irish bank done to make sure the errors of the past are not repeated? On DIRT, it has taken responsibility for the compliance function from branch managers and centralised it at the head office, where a tax compliance manager has been appointed.
As regards overcharging, the transparency of the fee and interest-charging structure has been improved and staff have been trained in the new procedures.
Action has also been taken over offshore investments. The bank has stopped selling these policies and the financial services division has been reorganised. A new management team reports into the retailing division of NIB's parent, National Australia Group. All policies and procedures now comply with the standards of the Financial Services Authority.
What is harder to quantify is what has been done to change the bank's culture to being one of "compliance and a shared determination to establish the organisation as a good corporate citizen".
The autonomy of the Republic of Ireland operation has been severely curtailed and it has been integrated more deeply into National Australia Group. All the business support functions - such as finance and administration - operate on an all-Ireland basis and NIB now has a common board with Northern Bank, which in turn is overseen by the European Board Audit Committee of National Australia Bank.
None of the pre-January 1998 senior management remains at the bank. Only one executive director, Mr Grahame Savage, remains on the board. Mr Savage is now managing director of National Australia Bank Europe.
It is an impressive list. But the changes appear to be aimed more at reassuring the regulators - or any prospective purchasers - that there are no further skeletons in the closet than winning the trust of the public. The bank believes - probably correctly - that winning the trust of customers is best done over the counter at the person-to-person level.
The good news for the bank in this regard is that thanks to the DIRT inquiry and various political corruption tribunals NIB's failings don't even make it into most people's top-five scandal list. The bad news is that this market research gem shows just how jaundiced people have become and how much work National Irish Bank still has to do if it is serious about winning back its good name.
jmcmanus@irish-times.ie
