Ulster Bank chief executive Jim Brown said he was turning down this year's annual bonus after a computer meltdown left thousands of customers without access to cash.
He pledged an independent inquiry into the IT collapse last month which affected customers across Ireland and said nobody would be left out of pocket. Details of a compensation package will be announced within days.
Despite insisting hours earlier he would not make a decision until his bonus was reviewed at the end of the year, he later said he would not be taking it.
He said: "Everyone at Ulster Bank is completely focused on putting things right for our customers.
"I don't want there to be any doubt that this is also my personal priority. I am personally committed to re-earning the trust of our customers. I have therefore informed the Ulster Bank board that I do not wish to be considered for an annual bonus award for 2012."
It followed calls from politicians north and south of the border to turn down his bonus this year as a goodwill gesture.
The bank initially estimated that about 100,000 customers across the country had been affected by the error, some with limited or no access to their funds at all.
Mr Brown told an Oireachtas committee the figure is much higher than originally believed and that at least half of Ireland's 1.1 million customer base has suffered.
The bank has an estimated 1.8 million customer base across both the Republic and Northern Ireland.
The banking boss unreservedly apologised to customers and said the situation was unacceptable, but he ignored calls from Sinn Fein TD Pearse Doherty to reconsider his position. "My focus right now is getting the bank back to normal as quickly as possible," said Mr Brown.