Bank of Ireland opts for continuity candidate — of sorts — as new chief executive

With Francesca McDonagh, the British-born banker brought in five years ago to take charge of Bank of Ireland, set to hand back her swipe card by the end of this week to take on a top job at Credit Suisse, Ireland’s oldest bank may not be reverting to its tendency of promoting insiders.

But it’s landed on the next best thing: a senior executive that had only left the bank five months ago, Myles O’Grady.

The Irish Times has established that O’Grady, a one-time senior finance executive with AIB who joined Bank of Ireland in June 2019 and went on to become its chief financial officer months later, is returning to the fold after a short period with Musgrave, subject to regulatory approval.

The vexatious issue of pay caps and a bonus ban across bailed-out Irish lenders that Bank of Ireland bemoaned when O’Grady decided to quit last year has not changed. But a basic salary along the lines of the €950,000 that McDonagh was earning would be double what he was on as chief financial officer.

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While there had been strong speculation that Bank of Ireland was set being in another senior banker from overseas, it makes sense to pick a continuity candidate — of sorts — at a time when the bank is trying to bed in the acquisition of Davy, which it reacquired in June, and most of KBC Bank Ireland’s loan book and deposits, which are set to move by the end of next March.

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It may also speed up a resolution to the long-standing Central Bank of Ireland enforcement investigation into the bank’s role in the Irish tracker mortgage scandal, which is set to lead to a multimillion euro fine.

A chief executive with a deep knowledge of the bank would also be able to move at pace at setting fresh financial targets, which were promised by the end of the year, but have been put on hold since McDonagh decided to quit.

Meanwhile, a cynic might add that the last thing a board that presided over a massive €1.15 billion IT overhaul in recent years with questionable results — including an often-frustrating mobile banking app and a continuing reliance on some legacy systems — wants is for a complete outsider to come in and call this out.