Two of Allied Irish Banks' leading executives have been forced out after the Government effectively took control of the group, it has been announced.
Chairman Dan O'Connor will quit within weeks while managing director Colm Doherty will leave the bank before the end of the year after 13 months in the job.
The state is expected to pump another 2 billion euro into AIB on top of the 3.5 billion euro put in last year as the management fights to source 7.9 billion euro needed to balance the books.
Finance Minister Brian Lenihan said the boardroom changes are necessary but refused to say if he ordered them. "We are a small country with a very fragile banking system and that type of political pyrotechnics does not actually help in promoting confidence in the system worldwide," he said.
The additional funding gives the taxpayer majority ownership in AIB and the Irish state will hold 75% voting rights.
"The bank is viable but it is unattractive to external investors. The state has to make the necessary capital investment but the bank will be restored in its greatness," Mr Lenihan said. "Management change, board change have to take place now in this institution. The bank needs a new beginning so it can be restored to its former greatness."
According to AIB's annual report for 2009, Mr Doherty made a total of 833,000 euro, which included a salary of 622,000 euro, 145,000 euro pension contributions and 66,000 euro in benefits like a company car or special directors' loans. He also had share options. Mr O'Connor was paid 187,000 euro in fees. His flat fee for executive chairman was 276,000 euro a year.
AIB has already gone some way to refinancing itself with the sale of its profitable Polish wing BZWBK to Spanish giant Santander for 2.5 billion euro.
The bank has also transferred 6 billion euro of loans to the state's "bad bank", the National Asset Management Agency (Nama), and another 13.5 billion euro is expected to move over.
The minister said AIB is unlikely to be able to source money on the open market.