Sunday 28 May 2017

Surprise as AIB picks non-banker as new CFO

Byrne's main task is to raise billions of euro for lender's refinancing

ESB finance director Bernard Byrne ticked the boxes in terms of experience with corporate
restructuring, dealing with large organisations and unions, a government shareholder, and the
capital markets
ESB finance director Bernard Byrne ticked the boxes in terms of experience with corporate restructuring, dealing with large organisations and unions, a government shareholder, and the capital markets

JOE BRENNAN

AIB, the country's biggest bank, has chosen the ESB's finance director to head up its finance department at a time when it is seeking to raise billions of euros to bolster its balance sheet against mounting loan losses.

People who knew Bernard Byrne played down the fact that he had no banking background, saying he should be able to bring "fresh thinking" to AIB.

Some market players expressed surprise that Mr Byrne would not initially join the group's board as he became chief financial officer. However, sources said he was expected to be given a seat "in due course", and that he would attend board meetings in the meantime, when necessary.

They said he ticked the boxes in terms of experience with corporate restructuring, dealing with large organisations and unions, a government shareholder, and the capital markets.

The chartered accountant hit the financial headlines in 2003 when, as deputy chief executive of IWP International, he led an abortive management buyout approach for the personal-care and householdproducts company.

He had spent the previous five years trying to restructure the group's debt mountain, which had been built up over the prior decade through 28 acquisitions. Market sources familiar with the pitch at the time said Mr Byrne was looking to carry out a massive refinancing of IWP's borrowings following a takeover.

In the event, the company's chairman and founder Joe Moran said the 44c-a-share offer did not reflect its "inherent value". The share subsequently collapsed to just 3.5c, when the vulture funds that had bought most of its debts took control of the company in 2006.

Mr Byrne began his career with PricewaterhouseCoopers in 1988 and went on to join ESB International in 1994, where he spent four years as its commercial director.

Following five years with IWP, he re-joined ESB in 2004 as group finance director. He was unavailable for comment yesterday.

Experience

Colm Doherty, AIB's new managing director, said: "Bernard brings with him a wide range of experience in the financial management of both domestic and internationally focused organisations."

The AIB boss said that Mr Byrne's "familiarity with our areas of operation, coupled with the external perspective he brings to the role, will be a major asset to the group as we position ourselves for the future".

Meanwhile, AIB's acting chief financial officer, Maeliosa O hOgartaigh, who stepped into the brief when previous incumbent John O'Donnell stepped down last July, will remain in place until Mr Byrne joins the bank in May.

A senior Dublin-based fund manager yesterday raised the question as to whether AIB could go out and market a "rights issue" share sale until the new finance boss had his feet under his desk. The final vacancy on Mr Doherty's management team is that of chief risk officer. It is understood that an outside candidate has been identified but that he is still going through a strict new vetting procedure with the Financial Regulator.

Irish Independent

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