AIB in U-turn over 40m euro bonuses
Allied Irish Banks has revealed that it will not pay the controversial 40 million euro in bonuses to staff members.
The U-turn was announced after Finance Minister Brian Lenihan intervened and wrote to the bank's board overturning its legal advice.
The minister said payment of the financial support for the State-funded institution was conditional on the non-payment of bonuses awarded, "no matter when they may have been earned".
AIB executive chairman, David Hodgkinson, said the board welcomed the minister's actions and was relieved to be in a position not to pay these bonuses.
"We are determined to position the bank to play a full role in the recovery and development of the Irish economy," he said.
"In doing so, we are committed to treating our customers, staff, the taxpayer and the public in a fair and transparent manner."
The High Court last month ordered AIB to pay backdated bonuses to selected staff after the bank failed to enter a defence against a case taken by a trader.
AIB said it had received strong legal advice that it was obliged to pay these bonuses.
"However the letter from the minister conveys a decision by him to legislate which overtakes this obligation," it added.
The letter also highlighted that without the State support, AIB could not have survived until now.