AIB chief executive David Duffy announces surprise departure to National Australia Bank
First Trust Bank parent Allied Irish was forced to begin looking for a new chief executive after David Duffy announced his surprise departure from the Irish state-owned bank, which is currently gearing up for a share sale.
Mr Duffy has led the bank since the end of 2011 and recently oversaw its return to profitability. He is leaving to join National Australia Bank's troubled UK wing, which embraced Northern Bank before its sale to Danske.
Mr Duffy said the time was right for a new chief executive to lead AIB through the next stage of its recovery. A date for his departure has not been set, but the Republic's Finance Minister Michael Noonan said Mr Duffy will stay on for about six months until a successor is found. Mr Noonan, who recently appointed Goldman Sachs to advise on the bank's sale, will consult with AIB chairman Richard Pym on the search for a successor. Insiders said an internal candidate is likely as shareholders are unlikely to want the bank to have a foreign chief executive and chairman.
Mr Noonan said Mr Duffy had built a strong, capable management team and the outlook for the state-owned lender was positive.
The finance minister tried to play down the importance of the departure, saying most the heavy lifting has been done. "The extensive restructuring required is largely completed and the bank has significantly improved its relationship with new and existing customers. The bank has been returned to profitability and passed the recent European Central Bank (ECB) comprehensive assessment. The bank is now a very valuable asset for the Irish taxpayer."
Mr Duffy will take over as chief executive at National Australia Bank's Clydesdale Bank within the next few months. NAB said it is looking at ways to exit the UK market after years of poor performance. His predecessor at Clydesdale was paid close to £1m while Mr Duffy earned around a third of this thanks to the salary cap on state-owned banks.
AIB said Mr Duffy will remain on the board to support its quest for his successor.
"My time at AIB has been immensely rewarding, both professionally and personally. The bank is well positioned to contribute to Irish economic recovery and to serve customer needs," Mr Duffy said in a statement.
"Having returned to profitability, received approval of the bank's restructuring plan and passed the recent ECB/EBA (European Banking Authority) comprehensive assessment, I believe now is the right time for a new CEO to lead the bank through the next phase of its recovery and growth and a multi-year process of returning capital to the Irish state."
Mr Duffy, a former senior executive at South Africa's Standard Bank International and Dutch bank ING, oversaw cost-cutting that reduced AIB's workforce by almost a fifth, cut salaries by up to 15% and shut branches in a strategy that has begun to turn the bank around earlier than expected.