I move amendment No. 1:
In page 3, before section 1, to insert the following new section:
1.The Trustee Savings Banks Act, 1989, is hereby amended by the insertion of the following section after section 56:
56A.–In making an order pursuant to section 57 (as amended by the Trustee Savings Banks (Amendment) Act, 2001) the Minister shall have regard to the desirability of making provision in such order for persons who have for a substantial period been customers of a bank which is the subject of an order to receive a recognition of their loyalty to that bank.
This Bill effectively reorganises the Trustee Savings Bank into companies and provides for ESOPs so that employees of the TSB can get a reasonable deal, albeit with the exception we have just mentioned. Legislation relating to private sector institutions and companies being transferred to a private or limited company capacity has not taken the customer into consideration. This especially applies to the long-serving customer who has been loyal over the years. It is particularly true of financial institutions, which are notorious for milking the customer for all they can get. They apply charges to beat the band, many of which are given all sorts of descriptions. People learn about the charges in circuitous ways. The customer gets very little in return and is often jettisoned at the end of the process.
The Minister will remember a debate a few week ago when we tried to give the Central Bank some regulatory powers in relation to the closure of branches by financial institutions. The Bank of Ireland is closing over 20% of its Irish branches. Senators on the Government side, including Senator Finneran, mentioned that many branches of banks, and not just post offices, are being closed in rural areas without consideration for the customer.
It is time for customer loyalty to be recognised, as is the case with employee productivity and loyalty. Employees are given 15% shares, which are quite valuable. Unfortunately, they are only given to current employees. Clients and customers who have served an institution, in this case the TSB, for a lifetime are not rewarded in any way. The manner in which the bank operates may change dramatically and customers may have to conduct their business elsewhere, although some will remain. The Minister of State should consider remunerating these loyal people in some fashion.
The TSB, like all other banks, has been enormously profitable. When the Minister for Finance introduced this legislation, he mentioned an increase in profit of 75% in the past 12 months. The Bank of Ireland made profits of £750 million and the AIB's profits were almost £1 billion this year. All this money is made from customers and I think we should explore a mechanism of rewarding that. This amendment mentions "the desirability of making provision in such orders for persons who have for a substantial period been customers of a bank which is the subject of an order to receive a recognition of their loyalty to that bank".
The number of TSB customers would be much smaller than the equivalent number for one of the major national banks. The TSB is unique because of its nature, origins, history and the fact that it was effectively a mutual financial institution, not dissimilar to the credit union banking system. It contributed substantially to the well-being and development of the State. Its limited number of customers could be regarded as having helped to make the bank a success. The employees are being rewarded and now it is time to think about rewarding the customers in a similar fashion.