Staff at AIB may be facing job cuts early next year as part of a restructuring plan for the company, executive chairman David Hodgkinson said today.
"The new, smaller structure will mean that we will need less people overall than we have now," Mr Hodgkinson said in an e-mail to employees.
AIB plans to set up a "dedicated restructuring function" for businesses which "do not meet the future risk and/or return profile" of the group, he said.
Mr Hodgkinson was formerly chief operating officer at HSBC Holdings and was appointed AIB’s executive chairman on October 27th.
"The review must define the new shape of our businesses and determine the structure and resources we must take to achieve those objectives," he said.
Irish lenders are being forced to boost their core Tier 1 capital ratios, which gauge financial strength, to at least 12 per cent as part of an €85 billion international aid package for the country agreed on November 28th.
Banks will be able to draw on as much as €35 billion from the European Union, the International Monetary Fund and Ireland's own reserves to shore up their capital levels.
AIB, which faces majority State ownership, said November 30th it has been directed by the central bank to raise €5.3 billion of additional capital to reach a core Tier 1 capital ratio of 14 per cent. This means that AIB will have to raise a total of €9.8 billion by the end of February, including previous capital targets set by the Central Bank.
The €9.8 billion is in addition to €3.4 billion the company is generating from disposing of Polish and US assets.
AIB employed 24,600 staff at the end of December 2009, according to its most recent annual report. This includes staff in the Polish subsidiary Bank Zachodni WBK SA, which it has agreed to sell.
Bloomberg