Chairman opening speech at AIB's EGM
(Thomson Reuters ONE) -
For Immediate Release 26(th) July 2011
Allied Irish Banks, p.l.c.
Extraordinary Meeting
EXECUTIVE Chairman Mr. DAVID HODGKINSON's Speech
("AIB") (NYSE: AIB) Chairman's speech to AIB Extraordinary General Meeting in
AIB Group, Bankcentre, Ballsbridge, Dublin 4, Ireland
Check against delivery
Good morning ladies and gentlemen and welcome.
My name is David Hodgkinson, and I am the Executive Chairman of AIB.
We have significant business to conduct today with two separate meetings, so,
before we commence with proceedings, allow me to explain the sequence of events
as they will occur.
We will shortly commence with the EGM at which you will be requested to consider
and vote upon 7 separate but inter-conditional resolutions to facilitate the
receipt of capital from the State.
When the EGM finishes, we will break for between 20 and 30 minutes to collect
your votes and to allow you to stretch your legs. Some light food and
refreshments will be available during this break.
We will then commence the AGM and carry on until all business is complete. You
will then be requested to vote on the AGM resolutions.
Some further refreshments will be available at the end of the proceedings.
You will be given every opportunity during both meetings to comment and/or ask
questions.
We have a quorum, so I now formally open the EGM.
The Notice of the Meeting was posted to Shareholders on the 2(nd) of July 2011,
and so I will dispense with its formal reading.
I'm joined on the platform on my far right by Paul Stanley, our Acting Chief
Financial Officer, to my immediate right by Bernard Byrne, Director of Personal
& Business Banking, to my immediate left by David O'Callaghan, our Company
Secretary, and on my far left by Bryan Sheridan, our Group Law Agent.
The other Directors are present in the room, with the exception of Mr. Collier,
who sends his apologies.
In my capacity as your Chairman, I want to repeat very clearly that my
colleagues on the AIB Board, and I, wish to express our deep regret to all our
shareholders for the events which have led us to the position we are in today.
We remain acutely conscious of the enormous erosion in shareholder value which
has occurred and the real hardship for many shareholders brought about as a
result.
It has to be said yet again by people like me, so that we cannot forget, that
serious mistakes were made in this Bank which can't be allowed to happen again.
The Government has had to put an enormous amount of taxpayers' money into AIB in
order that we can help put things right both for our customers and the wider
economy.
So AIB exists today on the strength of the support of the Irish Government on
behalf of taxpayers.
I will again put on record our acknowledgement of, and gratitude for, that
support and for the key role that the Government and taxpayers continue to play
in helping us deal with the unprecedented events which this Company faces.
In turn, the Government rightly expects rigorous governance, protection of its
investment and appropriate behaviour by the Company's board and management.
Also too, that the bank should play as big a part as it can in the recovery of
the economy.
These are the minimum expectations also of our many shareholders and customers.
I can tell you that my Board colleagues, Senior Management and I, all subscribe
to the Government's expectations and, so, the Bank is going through an extensive
restructuring programme that incorporates organisational size, staff, business
focus, culture and governance, all of which is designed to prevent a repeat of
the disastrous and far reaching crisis.
However, I am also realistic about the scale of the challenge and it will take
time to get us to where we need to be, but I am confident that our efforts will
ultimately be successful.
The new pillar bank has been formed, including our new subsidiary, the EBS, and
we will have very strong capital ratios that put us in a position to
aggressively seek out deposits from at home and abroad with renewed confidence
and to demonstrate safety and security to depositors.
At present those depositors remain distracted by the sovereign story but that
will abate as a consequence of the Irish Government continuing to do the right
things and what I hope will be a cohesive response across Europe to the wider-
European problems.
We look forward as a pillar bank to playing a leading role in attracting funds
back to Ireland.
Since I met with you here in November last year, immediately following my
appointment as Executive Chairman, there have been many developments which have
significantly altered the fabric of AIB.
The level of change is apparent in that there is no member of the executive
committee, the bank's top executive team, that was in office before 2010. At
Board level, following this afternoon's AGM, there will not be any Board members
remaining that were in place prior to 2009.
We have moved to change the structure of the organisation to put customers at
the heart of what we do. The customer facing businesses are being supported
centrally by specialist functions and services.
Our risk framework and policies are being significantly strengthened so that the
problems we suffered can never recur.
The non-core unit is in place and performing ahead of expectations. Non-core
assets are those that no longer fit with AIB's new strategic direction, and some
businesses or portfolios which represent excessive risk or offer a poor return
profile. These businesses will be disposed of, wound down or reduced in size
over time.
A specially designated transformation delivery unit is also up and running and
transformation priorities have been agreed.
Top management appointments have now been made following a very rigorous
selection process which has closely examined people's leadership values and
behaviours.
We have a good mix of people from inside and outside AIB with many internal AIB
people taking on new or changed responsibilities.
Following these changes, AIB will have a strong foundation from which a
profitable business can be rebuilt and will be well positioned in the market as
one of the two pillar domestic Irish banks.
And our intention is to achieve these changes without losing sight of our key
objectives of supporting our customers through this challenging period and
helping to revitalise the national economy.
Both business and personal customers have been sending us a strong message
through workshops, seminars and focus groups held around the country, that they
want better access to well trained people who can engage constructively with
them.
To make that possible, we need to improve our processes and, in particular, we
have begun paying yet further attention to this in dealing with mortgage
customers in arrears and providing support and access to SMEs.
In relation to mortgage arrears AIB has now fully implemented the standards set
out by the regulator for ensuring all banks are dealing with customers in
difficulty with their mortgage arrears in a professional and timely manner.
We are providing increased training to our staff and we are now encouraging
customers who feel they are already in difficulty with their mortgage, or who
are aware of changes in their circumstances in the short or medium term that
will put them into difficulty, to contact us so that together we may consider
the options available.
This is a very stressful situation for customers and we will do all we can to
ensure that AIB provides professional support to customers when they come to us
to discuss this issue.
In relation to small and medium-sized businesses, we must provide genuine access
and assistance.
Our customers feel disconnected and even though there is money to lend, people
feel they cannot get access to it.
So we have to help our customers better understand the information we need so
that we can lend to them. We also need to make interaction between our
customers and ourselves easier and more productive.
So far, in pursuit of that vital goal, we have simplified the processes for
customers. We are tracking and following up on all loan requests by
businesses. We are better training staff to deal with businesses and deploying
them where they are most needed.
Our aim is to demonstrate that we want to lend and to re-establish ourselves as
trusted advisers to our customers and supporters of viable businesses.
To achieve our objectives, we require capital.
We are now nearing the end of a long sequence of capital raising actions that
has included business acquisitions and disposals, and a series of liability
management exercises that has seen us buy back virtually all of our subordinated
debt at a significant discount for bondholders.
Today, we are seeking shareholder approval for the final action in the
recapitalisation of AIB and our new subsidiary, the EBS.
In March, the Central Bank stated that it had set a new capital target for AIB
and EBS, requiring an additional ?14.8 billion in Core Tier 1 Capital.
The raising of this additional capital will be achieved by way of;
1. a Placing of shares with the National Pensions Reserve Fund Commission on
behalf of the State, which will generate ?5 billion in capital, in return
for the issue of 500 billion new Ordinary Shares;
2. the issue of Contingent Capital Notes to the Minister for Finance, which
will generate ?1.6 billion;
3. Liability Management Exercises during May and June of this year, a form of
burden-sharing in which the Bank buys back its debt from subordinated bond
holders at a discount, and which will have generated over ?2 billion in
capital;
and
4. a capital contribution to be made by the State to make up the balance of the
required ?14.8 billion, once the Minister is satisfied that an appropriate
level of burden-sharing has been achieved with the bondholders.
Should the resolutions be approved today, and arising from the issue of the new
shares, the Government will own 99.8% of the total issued Ordinary Shares.
By strengthening the Group's capital position, the Directors believe that the
Proposals should facilitate the Group's objective of providing for a sustainable
future as a systemically important bank, which will continue to support our
customers and contribute to economic recovery.
In forming this belief, the Board has taken into account the absence of any
viable alternatives to raise the necessary capital to meet the Central Bank
requirement, and also the fact that the sole provider of the required capital,
the State, is willing to provide the requisite capital on the terms described in
the Circular only.
Accordingly, the Board recommends to Shareholders that you vote in favour of the
Resolutions.
We will now hear questions and comments from the floor, following which we'll
consider and vote upon the resolutions.
My intention is to allow as many people as possible to speak and to try and
respond to your questions and comments as clearly as I possibly can.
So, first question please...
ENDS-
For further information please contact:
Alan Kelly Ronan Sheridan
Director of Corporate Affairs & Marketing Group Press Officer
AIB Group AIB Group
Dublin Dublin
Tel: +353-1-6412162 Tel: +353-1-6414651
email: alan.j.kelly(at)aib.ie email: ronan.j.sheridan(at)aib.ie
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Source: Allied Irish Banks, p.l.c. via Thomson Reuters ONE
[HUG#1533437]
Unternehmensinformation / Kurzprofil:
Datum: 26.07.2011 - 12:31 Uhr
Sprache: Deutsch
News-ID 56710
Anzahl Zeichen: 14051
contact information:
Town:
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Kategorie:
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