AIB committed to ‘independent’ future: CEO

AIB’s long term strategy is based on an “independent future” for the bank, outgoing chief executive Michael Buckley told staff yesterday.

In an unusual move Mr Buckley issued an internal memo to AIB’s 22,000 plus workers yesterday afternoon.

It followed the publication by the Irish Times of a proposal brought to the AIB board that it merge with US bank M&T in which AIB has a 23.2% stake.

In the carefully crafted 456-word statement, headed “AIB Strategy 2005-2100”, Mr Buckley disclosed that he presented the board with a paper which indicated two plausible long term scenarios for AIB.

“One would be quickly to create a much bigger and financially stronger transatlantic bank by merging AIB and M&T. The other would be to continue to pursue a stand-alone strategy focused on our existing strong position in Ireland, the UK and Poland. After a debate, there was a very strong consensus by the full board to choose the second approach. This will see the bank grow as a strong, independent European financial institution, which will continue to have a presence in the USA, both through our direct corporate banking activities and through our shareholding in M&T.

“The group executive then spent a considerable amount of time together in the final quarter of 2004 developing a more detailed long term strategy on that basis, which I presented to the board in January and which the board adopted,” he wrote.

Mr Buckley further disclosed that while AIB chairman Dermot Gleeson “facilitated the debate at the board”, Mr Gleeson “did not sponsor the merger scenario.”

Mr Buckley stressed that the debate on the bank’s long term strategy was considered in isolation, despite the fact that the proposals were brought to the board when the bank was under severe pressure last year, as a result of over-charging customers for foreign exchanges services and regulatory matters. It is expected that Mr Buckley will step down from his position before the end of the summer when chief executive designate Eugene Sheehy will take executive control of the bank.

AIB owned Goodbody Stockbroker’s headed their note to clients on the M&T scenario “Much ado about nothing.”

Bank of Ireland owned Davy Stockbroker’s analyst Emer Lang said they seriously question the logic of M&T buying a larger Irish bank.