Photographer: Aidan Crawley/Bloomberg

Bank of Ireland May Move Quickly on CEO Boucher's Successor

Updated on
  • Government pay cap and technology overhaul favor internal hire
  • Retail head McLoughlin and CFO Keating seen as candidates

Bank of Ireland may have to decide as soon as this month on the successor to Richie Boucher, as the lender needs to leave time for what could be a lengthy regulatory approval process for its next chief executive officer.

Retail banking head Liam McLoughlin and CFO Andrew Keating are considered the leading choices, according to bookmakers. Boucher announced last month that he plans to step down by the end of 2017, and the European Central Bank can take up to six months to approve the selected candidate, even if the person has been approved for another role in the past.

That potential timeline may force the board to settle on a candidate by the company’s first-quarter interim management statement at the end of this month, according to a person familiar with the matter. While the lender has said it will look at internal and external candidates, pay caps that come with the government’s 14 percent stake as well as the bank’s ongoing technology overhaul favor an insider, analysts said.

“The next CEO will be tasked with capitalizing on the recovery and growth in the Irish banking market, as well as implementing the significant IT-related investment program which commenced during 2016,” Diarmaid Sheridan, an analyst at securities firm Davy in Dublin, said in a research note on March 27. Sheridan said he expects an internal choice.

While the bank has only appointed one outsider as CEO in the past 30 years, it could consider the likes of Bank of Cyprus Holdings Plc chief John Hourican, or Jim Brown, who is leaving his job as head of Royal Bank of Scotland Group Plc’s Williams & Glyn unit, analysts said. The government cap on pay at bailed-out Irish banks limits executive salaries to 500,000 euros ($533,000) per year with no bonus.

RBS and Bank of Cyprus declined to comment.

Bank of Ireland’s shares are up 3 percent this year, after plunging 31 percent last year. The lender is seeking to pay its first dividend since the financial crisis.

Bank of Ireland has seen how searches can drag on. Permanent TSB Group Holdings Plc didn’t have a permanent chief financial officer between September 2015 and March this year. During that time, the bank lost at least one candidate for the position in part because of the time the ECB deliberations were taking.

Here are the most likely candidates from the bank’s executive suite and a couple of dark horses from its board of directors, based on interviews with people in and outside the firm.

Liam McLoughlin

McLoughlin is seen as the most likely pick because of his experience in different parts of the bank. He joined the company in 2004, after stints at RBS’s Ulster Bank and Ireland’s debt office, the National Treasury Management Agency.

He’s led Bank of Ireland’s retail arm since 2012, after previously working in corporate banking, capital markets, and finance. That’s given him familiarity with most of the bank’s main revenue drivers. He’s also seen as playing a key role in the bank’s tech overhaul.

McLoughlin, 53, doesn’t have a large profile outside the bank, as Boucher and Keating handle most public appearances with investors.

Andrew Keating

Keating, 46, who joined Bank of Ireland in the same year as McLoughlin, has a bigger profile but narrower experience. An accountant by training, Keating has spent most of his career in finance positions at Bank of Ireland and Ulster Bank. He’s routinely at Boucher’s side for earnings presentations and analyst meetings. 

Keating played a major role in numerous capital raises by the bank since taking the CFO role, and has a strong reputation among investors.

If McLoughlin gets the CEO role, Keating could move to lead the Irish retail division. That would position him as McLoughlin’s eventual successor.

Fiona Muldoon

Muldoon, a board member since 2015 and CEO of insurer FBD Holdings Plc, has experience with a turnaround story. Since she took the latter job permanently in October 2015, Muldoon has sold off the company’s stake in its property arm and focused on FBD’s core insurance business. The stock has risen more than 16 percent and the insurer expects to return to profit this year.

A former senior official at the Irish central bank, Muldoon, 49, would be the first woman to lead one of the main Irish banks. Her background is almost entirely in insurance rather than banking, which may count against her.

Patrick Kennedy

A lack of banking experience may also hurt Bank of Ireland deputy chairman Patrick Kennedy. Kennedy, 47, was CEO of bookmaker Paddy Power Plc for nine years until 2015. The share price more than quadrupled during his tenure as he pushed the company deeper into online gaming and away from its traditional betting shops, a move that may draw parallels with banking customers migrating from branches to online banking.

As well as sitting on the Bank of Ireland board, Kennedy has a number of other business interests including chairman of travel technology firm CarTrawler. Still, if the board wants to pursue acquisitions or expand into other markets, Kennedy may be the choice.