Irish Life & Permanent chief executive, Mr David Went, has dismissed the proposal to merge AIB and Bank of Ireland as "fantasy". After the group's annual general meeting in Dublin yesterday, Mr Went said the notion, put forward by Bank of Ireland chief executive, Mr Michael Soden, made no sense and would be tantamount to nationalising the entire Irish banking sector. "They might as well nationalise all of the banks and close the Post Office."
Mr Soden said it would be better to have one large Irish bank than to lose control of domestic institutions to foreign owners. He believes this would be very damaging for the Irish economy. Mr Went does not accept this arguement.
He also said Irish Life & Permanent had restructured its US business and this should be profitable this year. It is valued at around €170 million and is the only remaining business Irish Life & Permanent retains in the US. Mr Went suggested it would be sold within 12 months.
At the meeting Irish Life & Permanent chairman, Mr Roy Douglas, asked customers to bear with it during the integration of Irish Permanent and TSB, a move which has led to long queues and poor service in some branches.
Addressing shareholders in Dublin yesterday, Mr Douglas said the merging of the two bank operations was nearly complete. "I would like to thank customers for their forebearance if we have slipped in terms of service. You can rest assured this is uppermost in our minds."
One shareholder, Mr David Tyrell, questioned the benefits to shareholders of the merger citing the great inconvenience this has caused to himself and other customers at its Clondalkin branch. "Queues are out the door morning, noon and night. The level of service, particularly at TSB branches, is atrocious."
Mr Douglas said the bank did recognise the quality of service to customers had been affected during the transition but stressed that, in the longer term, the merger would give customers a more comprehensive banking service.
The thorny issue of TSB accountholders not receiving any free shares as a result of its takeover was also aired, with one shareholder asking Mr Douglas to consider paying a loyalty bonus at some time in the future. Customers lost out on a free share bonanza because TSB Bank was technically owned by the State.
Charges levied on various products came under scrutiny and shareholders also questioned the group about the reduction in profit margins expected in the next 12 months in the highly competitive mortgage and life and pensions markets.
Mr Douglas said it had invested in technology which would greatly improve the efficiency of these businesses and offset some of the loss in profit margins expected.
The group has enjoyed strong trading in 2002 to date, reporting growth in its key banking and insurance activities.
It claims to have 25 per cent of the mortgage market, 12 per cent of all savings, 20 per cent of the new car finance sector and 20 per cent of the Republic's life and pensions business.
"We are very confident for the outlook for the year. The Irish economy remains strong and the underlying conditions for our business remain very positive. We are looking forward to another favourable year in 2002," said Mr Douglas.
