Tuesday 23 January 2018

Bank boss says she won't quit IL&P until the job is done

Bowler trying to find steady partner for Permanent TSB

Irish Life & Permanent chairman and Budget Travel founder Gillian Bowler has set up the online venture Clickandgo.com. Photo: David Conachy
Irish Life & Permanent chairman and Budget Travel founder Gillian Bowler has set up the online venture Clickandgo.com. Photo: David Conachy

Joe Brennan

Gillian Bowler is looking remarkably unscathed following a public skirmish last week with Michael O'Leary's Ryanair over her new internet holiday venture.

Within hours of the businesswoman's build-it-yourself package holiday website going live, the carrier's trigger-happy lawyers sent a cease and desist letter to Clickandgo.com for "unlawfully" selling its flight.

"We're in discussions with Ryanair and hope to reach a suitable agreement," says the Budget Travel founder. "In the meantime, we had 7,000 unique visitors last Friday (the first day of trading) and the hope is that we'll end up catering for 10,000 customers by the end of the year."

Like her nemesis of the week, Bowler is something of a self-styled maverick turned card-carrying member of the entrepreneurial elite. Her rise is the stuff of Irish corporate legend.

Having arrived in this country in 1971, the Isle of Wight native went on to shake up the staid travel industry by setting up Budget four years later -- before selling control to British group Granada in 1987 for Stg£4.6m (€5.5m). She finally cut ties with the firm in 2007 -- stepping down as chairman as it went through a fourth ownership change.


Bowler (57) says she was "personally devastated" when Budget went bust last year, with the loss of 172 jobs. "It was, after all, the company I founded. You could have tried buying it out of examinership -- but it was the wrong business model that will never work again."

Her main focus for the past few years -- steering Irish Life & Permanent through the biggest financial crisis in the history of the State -- hasn't been easy either.

Indeed, Bowler cuts something of a lonely figure these days in being the only chairman left standing among the six guaranteed institutions.

IL&P's chairman of six years has reasons to be proud as it is the only group among the six covered lenders that does not need to join NAMA or require a taxpayer bailout -- having avoided the commercial property lending boom.

But it was sucked into the vortex as Anglo Irish Bank began to implode two years ago.

IL&P was thrown into crisis mode in February last year when it emerged it had lodged €7.45bn with Anglo in late September 2008 -- serving to flatter the now-nationalised group's financial standing.

Within the space of 36 hours, Bowler presided over the resignations of her finance director Peter Fitzpatrick, treasurer David Gantly and, finally, chief executive Denis Casey.

Bowler made it clear at the time that the board had not been made aware of the transactions -- and had they been put to the board, they would not have been permitted.

She said she wasn't going to don the "Green Jersey Agenda" defence for the transactions and that they were "absolutely wrong".

But should she not have stepped down, anyway? "All of my friends and my husband told me to, saying: 'This is going to ruin your life.' Walking away would have been the easiest thing to do -- but I couldn't."

Colleagues and senior figures in the gossipy Dublin investment community see Bowler's resolve to sort out the mess as a deeply personal mission. "Don't be deceived by her tiny frame and pleasant demeanour -- they envelop a steely resolve," says one person who has seen her operate in a board room.

Some trace Bowler's now-famous "I am a fighter, not a quitter" stance back to when she was diagnosed with a life-threatening kidney condition at the age of 12. In an interview four years ago, she recalled a consultant telling her there wasn't much more he could do and that it was up to her to fight to survive.

At the height of the financial crisis, Bowler was putting in 70- to 80-hour weeks -- though they have since been cut back to about 48 hours.

"I still have a pillow and quilt in my office for when I got a chance to put my head down. We were all (her management team) putting in crazy hours. But the hardest part was dealing with the fact that the staff and shareholders felt so let down.

"I'd read all the books on crisis management -- but, just thinking back on it, that period was indescribable and very painful. I'll never forget it."

The worst period, she says, was the 13 weeks or so between the scandal emerging and having to face shareholders at the group's AGM that May.

Observers were taken aback at how Bowler managed to turn a hostile crowd around over the course of the meeting. Had AGM fatigue finally set in? After all, Irish Nationwide and Allied Irish Banks had already held drawn-out shareholder meetings that week -- climaxed by the egg-smattering of then AIB chairman Dermot Gleeson.

Some put it down to Bowler's careful reading of the mood -- helped by the fact that she had done the 'tea-and-sympathy' round with shareholders before the meeting. She dismisses this. "I have always made a point of using the AGM to go around and meet as many people as possible."

Bowler is reluctant to add to what she has already put on record regarding the Anglo saga, as investigations by the Office of the Director of Corporate Enforcement and the gardai are ongoing. "To say something now might only prejudice the outcome of these investigations."

For now, Bowler and her chief executive, Irish Life 'lifer' Kevin Murphy, are focused on trying to find a steady partner for the group's troubled adolescent, Permanent TSB.

'Permo' has been sticking for some time to a forecast that combined bad loan losses over three years should come in between €800m and €900m -- only a fraction of the impairment charges faced by peers that chased property developers.

By comparison, analysts reckon AIB, Bank of Ireland and Anglo will end up writing off a combined €35bn-plus of loans.


But the bank's funding model is broken. With €2.46 out on loan for every €1 on deposit -- a loan-to-deposit ratio of 246pc -- it is the most reliant Irish bank on the volatile wholesale market for funding.

It was also among the first lenders to plunge into the 100pc mortgage space. The fact that 60pc of the mortgage lender's loans are on ECB tracker rates has also made it very difficult to restore itself to profitability.

It's more than a year since IL&P went about restructuring itself into a new holding company to make it easier to spin off Permanent TSB into an industry-wide merger.

But if anything, the prospect of a so-called "Third Force" tie-up -- originally seen between the bank, EBS and Irish Nationwide -- seems more remote now than ever.

"That whole 'Third Force' phrase may be a bit tired at this stage," admits Bowler. "But I've absolutely no doubt that we'll find opportunities."

Economic trend spotters, encouraged by a tentative stabilisation in consumer sentiment and the public finances as well as rising exports, may also be encouraged to find that Bowler has gone back to wearing her trademark sunglasses.

"I don't know whether you can read that as an economic indicator."

For the record, the IL&P chairman believes it will be 2012 before the economy is back on an even keel. But she's coy at pointing to her own exit date.

"I'm not the type of person to cling on to the armchair. I see my job as bringing back shareholder value. Once that's done, I won't be needed."

Irish Independent

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