Banking Sector

Wednesday, 8 June 2016

Questions (142)

Michael McGrath

Question:

142. Deputy Michael McGrath asked the Minister for Finance the number of contracts a building society (details supplied) has terminated in respect of agents who were selling products on its behalf in towns and villages around the country in respect of each of the past six years; the selection criteria used by the society in respect of these decisions and the process involved; if this was as a result of a change in the business model of the society; and if he will make a statement on the matter. [14652/16]

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Written answers

Minister for Finance

As the deputy is aware, EBS is a subsidiary of AIB, which it acquired in July 2011. Notwithstanding the State's shareholding in AIB, the deputy will understand that I have no role in the day-to-day to day management of either institution. All decisions on strategy or personnel are therefore solely a matter for the management teams of AIB and EBS. The arms-length relationship between the Minister and the bank are set out in the Relationship Framework Agreement, which can be found here: http://finance.gov.ie/sites/default/files/Allied-Irish-Banks1.pdf.

When AIB acquired EBS, it had 90 agency offices. The bank has confirmed to my officials that at December 2015 EBS had 71 agency offices. AIB advise that the reduction in the number of agency offices was a consequence of the rationalisation of the EBS distribution network in response to business needs and market demand. Moreover, AIB does not deem it appropriate to comment further at this time as there are a small number of former agents in litigation against the bank in respect of the termination of their agencies.