Twitter
Advertisement

Allied Irish names new CEO ahead of possible sale

Appointed as government considers share sale | Byrne was bank's retail chief, former ESB finance director | Banks facing political and public pressure to cut rates

Latest News
article-main
Representational image
FacebookTwitterWhatsappLinkedin

Allied Irish Banks (AIB) appointed Bernard Byrne as chief executive with immediate effect on Friday, handing the bank's head of retail and business banking the job of returning Ireland's second biggest lender to private ownership.

Byrne, an accountant who was finance director of electric utility ESB prior to joining AIB in 2010, succeeds David Duffy who announced his resignation in January, just a week after the government appointed advisers to kick off the sale of its shares in the bank.

Ireland is aiming to recover the full 21 billion euros ($22.99 billion) it poured into AIB, the largest bailout of any Irish lender still trading. Its advisors Goldman Sachs are currently weighing up options for a sale.

Finance Minister Michael Noonan said last month that he would wait until the bank's half-year results before deciding on the timing of selling a minority stake and that November was the earliest date for a possible initial public offering (IPO).

Dublin sold a 25 percent stake in the smaller permanent tsb in April in a share offer priced at the top of the range, a key test of appetite for 99% state owned AIB.


LEGACY ISSUES

Byrne, 47, also takes over after AIB, like most Irish banks, returned to profit for the first time since the 2008 financial crisis last year as Ireland's economy grew faster than any other in the euro zone.

AIB said earlier this month that it remained profitable in the first quarter of this year after clawing back more money put aside for bad loans.

But Irish banks have struggled to grow their loan books with repayments and redemptions among heavily indebted lenders exceeding new lending.

Irish Central Bank governor Patrick Honohan warned on Thursday that the banks' return to profitability was modest and dependent on provision write backs, and that the crisis continued to have serious legacy issues.

Byrne will also have to navigate the political and public pressure Irish lenders have come under to cut mortgage rates deemed too high by the government, which last week threatened to penalise lenders if no action is taken.

AIB is so far the only bank to announce a rate cut.

Bank executives in Ireland are subject to a government-imposed salary cap of 500,000 euros and AIB said Byrne's package would be fully in line with government requirements.

The bank nominated Byrne to take over as chief executive a number of weeks ago, a source familiar with the matter told Reuters, but had to wait for approval from the European Central Bank's new Single Supervisory Mechanism (SSM).

 ($1 = 0.9133 euros)

 

Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.
Advertisement

Live tv

Advertisement
Advertisement