Friday 20 October 2017

Departing NIB boss may land key role inside semi-states

Bank boss Andrew Healy led a transformation of scandal hit institution before his well-flagged exit, writes Nick Webb

THE resignation of National Irish Bank boss Andrew Healy last week will doubtless see him linked with a number of high-profile posts including vacant positions at semi-states such as the Dublin Airport Authority, VHI and, possibly even Bord Gais, when John Mullins steps down later this year. He may even land a role at the Department of Finance.

Healy resigned from National Irish Bank (NIB) last week as part of a restructuring of the Danish-owned bank. It's not clear if he received a severance package. While bankers have rightly been bashed for their profligate lending and excessive risk-taking, Healy and NIB bucked the trend -- to a degree.

He became the youngest CEO of an Irish bank when appointed in 2005. Healy soon realised the property market was overheating and NIB was the first bank to cap its lending to the commercial property market. Its losses could have been much worse without that call. The bank had exposure to a mere 3 per cent of the commercial property market.

Despite facing a ferociously competitive market fuelled by the decisions of Bank of Scotland (Ireland), Permanent TSB and Ulster Bank to shovel out money to homebuyers with exceptionally high loan to value or 100 per cent mortgages, NIB remained conservative with its lending.

It has the most solid mortgage book in the country with impairments running at 3 per cent compared with an average of 10 per cent across the other leading mortgage lenders. The bank has received no bailout money from the Irish taxpayer.

NIB was also at the forefront of innovation, pioneering online banking in Ireland and becoming the first bank to introduce cashless branches, in a move that may be aped by many of its competitors in coming years.

NIB had been tarnished by scandal in the 1990s. Following revelations by RTE's George Lee and Charlie Bird it emerged that the bank had been involved in the overcharging of customers and in bogus non-resident accounts for the purposes of avoiding tax. A government inspector was appointed and reported on these huge regulatory breaches. The Office of the Director of Corporate Enforcement took disqualification proceedings against nine senior executives of the bank. NIB, which was owned by National Australia Bank, was sold to Danske Bank in 2005, with Healy taking the reins soon after.

Under his charge, NIB is almost unique in that it has not had a single regulatory breach over the past seven years, which has helped the shattered bank to rebuild its reputation on the Irish market.

There have been fears since the economic crisis erupted that Danske would simply up sticks and effectively exit the Irish market or shrink drastically, following in the wake of Rabo's ACC and Bank of Scotland's Halifax. However, NIB moved fast with its transformation programme, which saw a staggering 30 per cent of costs taken out of the business and the bank's strategy completely refocused.

By comparison, AIB, Bank of Ireland and the former Anglo Irish Bank are still in the throes of their restructuring programmes.

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