AIB's Strategy


AIB is continuing its focus of returning the bank to sustainable profitability by 2014 and playing a central role in the recovery of the Irish economy. As part of these goals, AIB has recently announced a revised strategy with the following key elements:

A renewed commitment to customers:
AIB is re-organising itself more efficiently so staff can spend more time with customers and a new streamlined operating structure will help to meet this goal. AIB is committed to developing a deeper understanding of the distinct needs of specific customer segments across its business and its product range. AIB's distribution capability will be enhanced to ensure the bank is meeting the requirements of customers, who range from retail clients to large corporate customers. Supporting customers will be at the heart of everything at AIB and the bank will provide the full spectrum of banking products and services tailored to individual and corporate needs.
AIB is also fully committed to supporting customers in financial difficulty and the creation of the Financial Solutions Group means the bank now has a unit dedicated to this important area. For SME customers in financial difficulty, the approach is to restructure loans, restore customer stability and establish a path back to viability. For mortgage customers in financial difficulty, the strategy is to work to ensure that homeowners can remain in their home, where possible. As part of the bank's Mortgage Arrears Resolution Strategy (?MARS?), AIB will provide new advanced forbearance options for customers. The emphasis is on early, open engagement as it is mutually beneficial for the bank and customers to manage issues in a constructive way.

A return to sustainable profit by 2014:
A renewed focus on income growth coupled with cost management measure will help AIB to achieve the goal of sustainable profitability by 2014. As part of the cost reduction agenda, AIB has announced the implementation of an Early Retirement and Voluntary Severance Scheme which will reduce the number of staff at AIB by at least 2,500 by 2014. The bank has also announced proposed changes to staff pay and benefits including pay cuts at senior levels and all employees who are members of a defined benefit pension scheme will be moved to a defined contribution pension model. AIB will also continue to focus on reducing costs across the bank and will explore out-sourcing opportunities where they make strategic and financial sense.
In addition to cost reductions, the bank is taking necessary decisions to drive income growth including focus on funding costs and adjusting the pricing of lending products to be more in line with cost of funding. The bank is focused on maintaining market share in all its key target markets - mortgages, SME and corporates and will focus more closely on how and in what sectors we use our capital.

A new customer-focused operating structure:
AIB's 'One Bank' strategy brings with it a revised and simpler organisational structure, another step in the bank's evolution towards being a fully customer-focused bank. AIB will in future operate around three points of focus - the domestic core bank, the UK comprising the business in Great Britain ("GB") and Northern Ireland ("FTB"), and the newly created Financial Solutions Group.
The domestic core bank will now be organised around customers and distribution on one hand and products on the other which will ensure that the bank's activities and aligned with the product management and development capabilities. These areas will be interdependent and there will be an end-to-end process from product development to customer delivery. This will allow frontline staff more time to focus on customers and will help to underpin a return to profitability.

Strong and inclusive leadership:
AIB is building a strong and diverse Leadership team, comprising individuals who bring a wealth of experience and knowledge, which will be invaluable in the bank's return to viability. This team will be supported by a Leadership Council comprised of individuals from all areas of the bank. The Leadership Council will be instrumental in delivering key strategic initiatives and managing risk collaboratively and is the first step in establishing a flatter, more agile structure for AIB.

A fresh emphasis on technology and innovation:
In future, customers will have even more choice in the range of ways they can bank with AIB and AIB will use technology to better meet the evolving needs of customers. AIB has begun this process already and customers will see greater flexibility in the near future in the range of products available to them online and over the phone.

A redefined distribution network:
AIB is repositioning its physical network as part of a wider integration of branch and direct channels. This will help to deliver seamless banking to our customers in a more cost effective way. AIB's branches remain a central part of our overall distribution strategy and will continue to be the main channel for customers to purchase products and services. However, AIB and An Post have now agreed to work together to extend the current banking services available at 1,100 post offices nationwide in Ireland and to include enhanced banking services at 90 selected post offices. This initiative with An Post will support AIB in making changes to the current branch footprint, including a reduction in the number of branches and sub-offices over time. EBS will continue to operate as a separate brand with its own distribution network, however, work will continue to streamline operations to remove duplication with AIB's systems. The customer proposition of FTB is also being aligned with the integrated channels approach and a number of branch closures will occur in the network as part of this process. Amalgamations and closures have already been announced at AIB GB as part of the strategy for the business. AIB GB will focus on SMEs, owner managed businesses, and professional firms with a significant emphasis on facilitating trade in both directions between Ireland and Britain.

Continued development of key stakeholder relationships: A relationship framework is now in place with the Minister for Finance which allows the bank to move the business forward and to manage the bank commercially. AIB is also in ongoing dialogue with the Department of Finance, the Central Bank of Ireland and the EU/IMF/ECB Troika as it seeks to rebuild the reputation of the bank and return it to profitability.



AIB is a registered business name of Allied Irish Banks, p.l.c.

Registered Office: Bankcentre, Ballsbridge, Dublin 4. Tel: + 353 16600311.

Registered in Ireland: Registered No. 24173.

Allied Irish Banks, p.l.c. is regulated by the Central Bank of Ireland.

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