Mr. Dick Spring:

I thank the Chairman and members of the joint committee for inviting me to appear before them in my capacity as a Government-appointed public interest director on the board of Allied Irish Bank. I have always valued the role played by Oireachtas committees as a forum for real engagement with agencies and organisations from outside the Houses. I genuinely appreciate the opportunity to, I hope, provide the committee with insight into my role in AIB.

I understand the chief executive of the bank, Mr. David Duffy, and members of his team had a constructive meeting with the committee in October. I assume as a result of that meeting members are probably au fait with the current overall position of Allied Irish Bank in terms of the progress achieved in returning the bank to viability and the work ahead that must be completed.

It is important for me personally and as a director of the bank to acknowledge the enormous debt owed by AIB to the Irish taxpayer, without which the bank would not exist. As a member of the bank's board, all my efforts have been focused on actions to stabilise the institution, to help it regain viability and, by definition, to ensure the bank plays a critical role in the recovery of the economy and returns, over time, as much as possible of the State's investment. This is a long and difficult journey. Painful lessons have been learned from the financial crisis, lessons that are helping us in the reshaping of Allied Irish Bank as a strong bank, functioning without State support, keeping the impact on the customer central to all decisions.

Like everybody else in this room and beyond I would like the bank to reach its goal quicker. However, the current issues in the economy are unprecedented and unique and will take time to resolve. The bank is vigorously implementing a strategy that will result in its return to viability while ensuring it plays a fundamental role in the recovery of the Irish economy. Since my appointment to the board of AIB in January 2009, I have witnessed enormous and positive change in the organisation. This re-organisation has ranged from a fundamental restructuring of the bank to a revised strategy to rebuild sustainability. AIB has, at every stage, worked closely and constructively with the Central Bank and the Department of Finance through the relationship framework agreement. I am pleased to say that AIB's relationship with Government and the regulator is constructive, open and marked differently from that which existed when I joined the bank in 2009.

When invited to join the board of AIB by the late Minister for Finance, Brian Lenihan, I was extremely conscious of the tumultuous effect the financial crisis had on the bank's relationship with Government. That relationship is now much more constructive as the bank navigates a path back to viability. The bank is in daily contact with the Department of Finance, senior management meet formally with Department of Finance officials on a monthly basis and the bank reports continuously to the Central Bank. Like other company directors in the bank, I am, as a director, subject to the requirements of company law in the discharge of my duties. My responsibilities are the same as those of other directors and I carry the same duty of care to our shareholders, namely, the Irish people, through the Government. These duties are to protect and enhance the value of the company for the Exchequer. The board has full responsibility for all operations and business of the bank in accordance with its legal and fiduciary duties. It must ensure the bank is in compliance with all regulatory and legal obligations and must at all times, working with the management team, ensure business is conducted in a prudent and sustainable manner.

I am also a member of Allied Irish Bank's board risk committee, which was established in the past two years, and a member of the nomination and corporate governance committee. The bank's work is continuous and painstaking. However, progress is evident on the ground. A total of 2,000 bank staff are now employed in supporting customers experiencing difficulties with their loans. We expect to see a rapid increase in the resolution of these types of loans in the next six months, where customers are working collaboratively with the bank. I recognise the critical role of AIB in contributing to the resolution of unsustainable debt. However, it is important to note that this is a complex issue and the bank's decisions in respect of debt restructuring must be based around the fundamental principle of any underlying affordability for the customer. Any other outcome creates an expectation that debt will be written off, which is not economically viable. In the year up to end October 2012, AIB approved €1.2 billion in new mortgages, which is comfortably in excess of the bank's internal target for the year of €1 billion. The approval rate in the year to date is in excess of 70%. During the same period, AIB's year-to-date SME lending reached €3.75 billion, which is in excess of the Government's target for the year. Approval rates for formal applications in the SME sector are in excess of 90%.

There is constant debate in regard to whether the banks are lending. Allied Irish Bank must lend to ensure it returns to a sustainable operating model that will allow it to generate its own capital and increase lending into the economy. As a director, I acknowledge that the bank has more to do in terms of improving its processes and customer engagement on lending to viable customers. However, the dynamics of the demand for new lending in the economy are complicated given the sheer volume of legacy debt which remains. It is incumbent on all of us to change the message and to ensure people are not discouraged from seeking credit on the basis of perceptions. The bank is continuously engaged in a process to promote lending through business initiatives for SMEs and mortgage holders and this will accelerate into 2013 as the bank seeks to implement its strategy more broadly. I am determined to ensure Allied Irish Bank supports the economy in its return to financial health in an expedited manner which demonstrates genuine leadership on the many complicated issues ahead while at the time treating customers fairly. This is being done in full co-operation with the Department of Finance and the Central Bank.

I understand the committee requires information in terms of my background. I have a strong connection with the labour and trade union movement in Kerry.

I also have a strong connection with the farming community in north Kerry, as my late mother came from a small-holding in Lixnaw. There was, and is, a strong work ethic in my genes. From the age of 14, I undertook summer employment in factories in Tralee, building sites in Birmingham or warehouses on Long Island. This was all to help with defraying the expenses incurred in educational pursuits.

I am a graduate of Trinity College and qualified as a Barrister of Law at King's Inns. I spent a number of years practising on the Munster circuit in the 1970s. In 1979, I was elected to Kerry County Council and Tralee Town Council. I was elected to Dáil Éireann in 1981 and became a Minister of State in the Department of Justice at that time. I became leader of the Labour Party in November 1982, a position I held until 1997. I was Tánaiste, Minister for the Environment, and Minister for Energy during the coalition governments of the 1980s. At that stage, I experienced difficult enough economic times. I was again Tánaiste and Minister for Foreign Affairs from 1993 to 1997, at which stage I stood down from the leadership of the Labour Party after 15 years.

Since exiting public life in 2002, I have been active in a number of business areas, especially in financial services and technology. I have helped companies to develop business in the Middle East and Asia in particular. I am particularly proud of my involvement with two companies based in Kerry, FEXCO and Altobridge, which are major employers in our region.

I have also devoted an amount of time to my chairmanship of the Réalta Global Foundation, which is a charity involved in addressing the serious problems of HIV-Aids treatment for large numbers of people in Uganda. In the past six years, we have raised over €5 million, mainly for research in the area of anti-retroviral drugs in an effort to assist HIV-Aids sufferers in that country. We also fund and manage an orphanage. We have built three health centres in conjunction with the Ugandan government and have made a meaningful contribution to the quality of life for many citizens of that country.

Since my appointment to the board of AIB in January 2009 there have been 139 meetings of the main board. There have also been 25 meetings of the board risk committee and nine meetings of the nominations and corporate governance committee since my appointment as a member.

In terms of my remuneration levels, in which I understand the committee is interested, I have received the following amounts of money since joining the board in 2009. First, I would remind the Chairman that the first decision at my board meeting was to reduce directors' fees by 25% at that time. I received the sum of €26,000 in 2009, €47,000 in 2010 and €59,000 in 2011, bringing a total of €132,000. After a taxation level of about 54%, which brings it down to €64,000, it would average about €21,000 per annum for my services to the bank.