BANK OF Ireland chief executive Brian Goggin announced yesterday that he will step down in the summer, a year earlier than originally expected.
Mr Goggin made his announcement yesterday as investors walked away from Bank of Ireland and its rivals, forcing a near 55 per cent fall in the institution’s share price to 34 cent.
The bank’s board, known as the “court of directors”, said yesterday that it has begun seeking a replacement, a task it will carry out at a time when speculation grows about the future ownership of the Republic’s financial institutions.
It is understood that the court had hoped to name his successor to coincide with a rights issue aimed at raising €1 billion to top up the €2 billion pledged by the Government as part of its planned recapitalisation programme.
In a statement yesterday, Mr Goggin said the recapitalisation would ensure the bank’s long-term strength and provide it with a basis on which its future could be built.
However, yesterday’s further collapse in the value of Irish bank stocks has cast doubt over both the recapitalisation and fund-raising plans. At last night’s close, Bank of Ireland was worth less than 2 per cent of the €18.50 at which it traded two years ago.
Mr Goggin’s move ends several weeks of speculation about his plans. The 59-year-old executive was appointed in 2004 and was originally due to step down in the summer of 2010.
A number of recent reports suggested that he would announce his departure ahead of the planned fund-raising, which was due to take place in March, paving the way for someone else to steer the bank through recapitalisation and out of the current turmoil.
Likely internal candidates to replace him include the head of Bank of Ireland’s retail business, Richie Boucher, and its UK chief executive, Des Crowley.
Mr Goggin succeeded Michael Soden, who resigned in controversial circumstances in 2004.
Both he and its governor, Richard Burrows, indicated yesterday that the parting was amicable.
In yesterday’s statement, Mr Goggin pointed out that, in June, he will have completed five years as chief executive and said that he believed the time was right to for someone else to take the group “forward to its next stage of development”.
Mr Burrows said that Mr Goggin had made a great contribution to the business. “Brian always had the best interests of the bank at heart and I believe that this has motivated his decision to seek retirement this summer to make way for fresh leadership to take Bank of Ireland through the challenges which lie ahead,” he said.
Mr Goggin worked for almost 40 years in Bank of Ireland, which he joined in 1969. He worked in its corporate, retail, mortgage and investment management businesses before taking the chief executive’s job in 2004.
