Monday 24 September 2018

BoI chairman Kane to go as bank readies key dividend

Bank of Ireland chairman Archie Kane
Bank of Ireland chairman Archie Kane

Donal O'Donovan and Charlie Weston

The chairman of Bank of Ireland, Archie Kane, is understood to have indicated that he plans to stand down after almost six years overseeing the lender.

It comes as the bank is set to confirm its first dividend in a decade later this month - to be paid to shareholders including the State.

It also follows last year's smooth CEO succession process. The Irish Independent understands from sources that Mr Kane has indicated his intention to stand down internally. The bank declined to comment last night.

Bank of Ireland deputy chairman Patrick Kennedy, the 48-year-old former CEO of betting giant Paddy Power is tipped to take over as chairman. That would cement the generational shift at Bank of Ireland, where Francesca McDonagh (42) was appointed CEO last October.

Scottish financier Mr Kane was appointed governor, or chairman, of Bank of Ireland's board of directors in June 2012, in the wake of the financial crash and of the bank's own State bailout following the retirement of Pat Molloy.

The bank's financial turnaround will effectively be complete when it announces its first shareholder dividend in a decade on February 26, when it publishes financial results for 2017.

During his time in charge, Mr Kane, a former Lloyds Banking Group executive, oversaw the bank's repayment of its €4.7bn State bailout, plus additional fees and interest. He also oversaw last year's succession process when long-time CEO Richie Boucher was replaced by British-born HSBC executive Ms McDonagh, the first woman to head the bank and like the chairman, a rare outsider to take a senior role at the lender.

However, the period also saw Bank of Ireland and its peers forced to compensate mortgage customers who had wrongly lost out on tracker mortgages.

In December, two other bailout era Bank of Ireland directors, Tom Considine and Pat Butler, announced their retirement from the board. Both had been named to the board by the State in the wake of its bailout.

Meanwhile, concerns have been expressed by BoI staff after it imposed a recruitment freeze.

It is understood the bank is aiming to save money to boost its cost-income ratio and help pay for a massive investment in a new IT system. But the move has angered staff who feel they will have to carry the extra burden.

The bank says it has implemented a group-wide recruitment freeze as part of its key strategic priority of transforming the bank, adding: "This will help reduce costs, improve efficiency and better leverage our internal talent." But it insisted that the block on new hirings does not affect what it calls customer-care roles.

Other cost controls include a reduction in travel for internal meetings, and less spending on consultants. Bank of Ireland has around 11,000 staff, and said it invests around €20m each year in staff development

The changes don't relate to the core banking investment, which has already been provisioned for, it said. A FSU trade union spokesperson said recruitment freezes are a blunt instrument and often result in increased workloads being imposed on current staff.

Irish Independent

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