New boss for €900m IT project in BoI reshuffle
Bank of Ireland has parachuted Gavin Kelly, head of distributions at the retail bank, into the group information officer role - handing him oversight of the lender's sprawling €900m technology investment, Project Omega.
The latest reshuffle in the bank's senior management ranks comes as the market continues to digest its decision to drastically increase provisions to cover redress and compensation claims linked to the tracker mortgage scandal. Last week the credit ratings agency Moody's voiced doubts about whether this additional cash would conclusively settle the issue, and warned the bank may be forced to book further provisions. Aside from the tracker problem, investors remain anxious about the scale of the savings to be generated by Project Omega, the largest such investment made by the lender to date. The latest executive changes indicate the bank is resetting the emphasis on this project. Staff were informed of the move in an email.
In an internal note, issued by chief operating officer Lewis Love, and seen by the Irish Independent, the staff moves are attributed to a request for a different role by Markus Tesch, the former Group CIO. In the email, Mr Lewis said that after "reflecting" on this, he decided that "with a strong IT team in place, what we needed was a business leader who had substantial frontline banking experience as well as a breadth and depth of experience and understanding across our customer base".
Mr Kelly's latest appointment cuts short his tenure in the retail bank. He took on the head of distributions position in April 2016, spearheading a €10m refurbishment in the bank's 250-strong branch network that included rolling out the Startlab project, an initiative aimed at providing both mentoring and work space to startups.
It is not clear who will take on Mr Kelly's role but a source at the bank said as the upgrades to the bank's IT systems progress, "it becomes more and more about how the technology can best be deployed within various business divisions".
According to Daragh Quinn, an analyst at the boutique investment bank, Keefe Bruyette & Woods, Project Omega remains a crucial driver of the share price as the market awaits clarity on how far the upgrade to the IT systems will drive down operating costs.
Earlier this year it was reported the massive investment was under review but sources stressed this did not mean work on the project was suspended.
Mr Quinn added the market is expecting Bank of Ireland's new CEO, Ms McDonagh to lay out the efficiency gains from Project Omega in February, when the lender is due to unveil its latest results.