Is it legal for AIB to now control EBS as they were meant to be two pillar banks ?

[James Kelly]

Now that were out of the crash is it legal that AIB can control EBS variable rates as the intention of Noonan joining them together was to make two pillar banks ? In fact AIB are not competing with EBS but are controlling what rates they can set so why have two banks with State funding pretending they are competing with each other ? This is another mockery to EBS mortgage holders that are paying higher variable rates to a zombie bank that has no power to compete.

Is there a legal case that can be taken to Europe about anti-competitive practice backed by the Government ?

 

[skrooge]

the intention of Noonan joining them together was to make two pillar banks ? In fact AIB are not competing with EBS but are controlling what rates they can set

You misunderstand, the pillar banks were meant to be 1. AIB (including EBS) and 2. BOI.

You own it you control it, so no one expected AIB and EBS to compete against each other - that would be bad business in anyone's book.

Thats not to say you don't have a legitimate concern about competition in the market and the role the Government played. However, this has already been looked at by Europe http://europa.eu/rapid/press-release_IP-14-524_en.htm

 

[James Kelly]

Thanks for the reply, sorry when i say joining them together I mean AIB and EBS together with BOI as the other pillar bank. My point here is that when AIB bought EBS for 1 Euro was there any thought for the implications of what that might mean for the mortgage holders in EBS now that AIB decide it can set the rates for EBS ? What was the point in them coming together if EBS are not capable of being independent, why not just merge them together into AIB ? In the current arrangement EBS has no control and cannot compete therefore why does it exist as a commercial entity ? Can customers of EBS take a court case that they are now part of an anti-competitive bank to Europe ?

Some interesting points here on the take over and possible reasons it was personally profitable to sell it off.

A NUMBER of key EBS executives are entitled to walk away from the building society with payoffs when its merger with AIB goes through, chief executive Fergus Murphy said yesterday.
The comments came after EBS revealed losses of €590m for 2010 as it took a €392m hit on loans transferred to Nama and booked additional losses on its mortgage book. In 2009 the society recorded a loss of €78.8m.
"It's a devastating result for the society," said Mr Murphy.

Mr Murphy said the building society was "working hard" with AIB on a plan to merge the two entities, following an announcement from the Government at the end of March.
"All going according to plan, we expect the merger to be completed by mid-summer," he said, adding that it was "likely" that EBS would incorporate some AIB products into its offering.

The EBS boss said details of how management would be split between the two entities had yet to be hammered out, but he admitted that "some" EBS executives had so-called 'change of control' clauses in their contracts.
These clauses typically allow executives to leave their jobs with a payoff if the ownership of their company changes hands.



Oireachtas Hearing

Deputy Kieran O’Donnell

Okay. Can I refer you to page 139, and just looking at the … just generally – it’s not the total there – but I notice between ‘01 and ‘08 that the level of bonuses paid, the top ten bonuses, there was €8,000 paid in 2001, that went over the years to €11,000 in ‘02, €235,000 in ‘03, it went to nearly €1.5 million in 2004, went down to half a million, €521,000 in ‘05, just short of €900,000 in ‘06, went to €1.5 million in ‘07, and down to €464,000 in 2008. In fact, I know one individual would have received nearly €450,000 of a bonus. How did that culture, within EBS, arise?