This week's better-than-expected results from Bank of Ireland, which showed a halving of losses in 2010, leave chief executive Richie Boucher well-positioned to keep Ireland's oldest bank out of majority state ownership.
As the Irish banking crisis that began with the "St Patrick's Day massacre" of bank shares in March 2008 enters its fourth year, Bank of Ireland is increasingly looking like it will be the only one of the Irish-owned banks to survive in anything resembling its original form.
Bank of Ireland lost €950m in 2010, just over half of the €1.8bn it lost in the nine months to the end of December 2009. In fact, the underlying performance was even better. The 2010 results included almost €2.5bn of losses on loans transferred to NAMA. This is a once-off charge which won't recur in 2011.
There was also a significant decline in Bank of Ireland's non-NAMA loan losses. The bank wrote off €1.88bn of bad loans in 2010, down from €2.27bn in the previous accounting period.
The 2010 Bank of Ireland results stand in stark contrast to those of its major Irish rival, AIB, which also published its 2010 results this week. It wrote off €13bn on bad loans last year, almost three times as much as Bank of Ireland even when losses on loans transferred to NAMA are included.
Last year's loan losses brings Bank of Ireland's total loan losses since mid-2008 to just over €10bn with last month's stress test results from US consultants BlackRock estimating that, in a worst-case scenario, Bank of Ireland might have to write off a further €14.8bn.
While these are huge losses, they pale by comparison with the more than €20bn of loan losses already racked up by AIB, with BlackRock predicting that there could be up to further €16.5bn in a worst-case scenario.
Bank of Ireland's much lower loan losses have meant that it has had to raise much less new capital than AIB. Under the new capital adequacy rules published by the Financial Regulator last month, Bank of Ireland will have to raise €5.2bn of fresh capital. It hopes that it can raise most of this from private sector investors.
This will allow Bank of Ireland to keep the state shareholding in the bank, which currently stands at 36pc, at under 50pc. Bank of Ireland is almost certain to be the only Irish financial institution which stays out of majority stake ownership.
By comparison, the Financial Regulator has told AIB that it needs to raise more than €13bn of extra capital. Given AIB's parlous position, most of this extra capital will have to come from the State, resulting in a further increase in the state shareholding, which already stands at almost 93pc.
So how did Bank of Ireland manage to get things so much less wrong than most of its competitors? It helped that Bank of Ireland never got quite so carried away by the euphoria generated by the property boom. Unlike AIB, which from 2005 onwards tried to compete head-on with Anglo, Bank of Ireland didn't completely abandon the basic banking principles of prudence and caution.
Sure, it made mistakes, but it made fewer of them than most of its competitors. Which, given the crazy state of Irish banking by the middle of the last decade, was about as much as could be hoped for. Bank of Ireland was the least crazy inmate of what had become an asylum.
Almost as important, when the merde did begin to hit the fan, Bank of Ireland quickly owned up to its problems. Unlike AIB, which spent almost two years denying the severity of the problems which it faced, Bank of Ireland came clean almost instantly.
Former chief executive Brian Goggin fell on his sword in January 2009 while chairman Richard Burrows exited in May of that year with an apology to shareholders for having trashed their investment. It mightn't be much consolation to Bank of Ireland shareholders who had seen the value of their shares fall by over 98pc, but it was in stark contrast to the unedifying seven-month stand-off between the AIB board and former Finance Minister Brian Lenihan over who should succeed Eugene Sheehy as chief executive.
However, while Bank of Ireland has in general managed its relationship with Government and regulators much better than AIB, there have been occasional tiffs. The first major spat occurred in January 2009 when Richie Boucher was nominated to succeed Goggin, a move which annoyed Lenihan, who was known to prefer the appointment of an outsider to the position.
Then there was the €66m of bonuses which Bank of Ireland paid to its staff during the period between September 2008, when the Government unconditionally guaranteed the deposits of the Irish-owned banks, and the end of 2010. These bonuses violated the spirit if not the letter of the agreement made when the Government injected €3.5bn of fresh capital into Bank of Ireland in 2009.
When the issue was first raised in the Dail, Bank of Ireland supplied the Department of Finance with apparently misleading information which seemed to indicate that no such bonuses had been paid. When it subsequently emerged that such bonuses had in fact been paid, Bank of Ireland apologised "unreservedly".
A report on the controversy by the Department of Finance found that there had been "a catalogue of errors" and that the information supplied by Bank of Ireland was "presented in a manner which minimised the level of additional payments made". Ouch!
There was also last year's contretemps when it was discovered that Bank of Ireland had topped up Boucher's pension pot by €1.5m, in a move widely seen as an attempt to circumvent the Government's cap of €500,000 a year on the pay of bank bosses. This would have allowed Boucher to retire in 2014 at 55 on an annual pension of €367,000. Once again Bank of Ireland quickly backed down with Boucher agreeing to waive the top-up.
Quite clearly Bank of Ireland, unlike it would appear AIB, has made a decision not to unnecessarily antagonise the Government. Which is, given that all of the Irish-owned banks, including Bank of Ireland, are utterly dependent on the State for their very survival, the only sensible policy.
Boucher has a slightly unusual pedigree for an Irish bank boss. He was born in what is now Zambia 52 years ago and still retains a hint of Southern African accent. Boucher was educated in Ireland, attending the exclusive Co Tipperary boarding school Rockwell
After Rockwell, he joined Ulster Bank. He spent his entire career with either Ulster or its parent bank RBS until he was recruited by Bank of Ireland in 2003 to be head of corporate banking. A seat on the board followed in 2006. When Goggin quit in 2009 the two main internal candidates for the job were Boucher and Des Crowley, the head of Bank of Ireland's UK operations.
With the Government's salary cap making the job relatively unattractive to outside candidates, the board opted for Boucher, who was generally reckoned to be tougher and more ruthless than his rival. However, despite Boucher's reputation, the two men continue to work together at Bank of Ireland.
Now that Bank of Ireland seems to be over the worst, the challenge facing Boucher is to nurse it back to health and make a full return to the private sector. Can Boucher deliver? It's a tall order but, if he does, Bank of Ireland will have pulled off the financial equivalent of the great escape.