BIAM loses 60% of US business

BANK OF IRELAND’S asset management arm has lost almost 60% of its crucial North American business in just 12 months, new figures show.

Bank of Ireland Asset Management (BIAM) said yesterday that funds under management on behalf of major North American clients had tumbled from €23 billion to less than €10 billion in the year to March.

The full extent of the €13bn fall had been masked by the bank’s full-year figures, which were released last week and showed an overall €10m decline in BIAM’s funds under management, from €57bn to €47bn over the year.

But the dismal performance from North America was partly offset by gains of around €3bn by BIAM’s Irish operations, as Irish pension fund and investment managers kept faith with the bank and bumped up their investments. Funds under management on behalf of Irish clients rose to €28bn and now account for 60% of BIAM’s business. Ireland accounted for 40% a year ago, which was around the same proportion as North America.

Only 20% of BIAM’s business now comes from US or Canadian pension funds or investment managers. The bank estimates that BIAM’s spectacular collapse in North America will wipe in the region of €40 million off revenues in a full year, representing around one-third of the division’s profits.

American clients began to desert BIAM last year on the back of a below-par investment record, but the slide accelerated later in the year after the departure of four top fund managers, who left to set up a new Dublin-based office for an Australian rival.

The division was also left without a dedicated chief executive for almost six months last year.

Current Bank of Ireland chief executive Brian Goggin stepped down as BIAM head after he was elevated to the top job in Baggot Street last June, but the position was only permanently filled in November when Kevin Dolan was headhunted from a French subsidiary of investment banking heavyweight Rothschild.

Mr Goggin has denied that the delay in finding his replacement affected relationships with clients.

The bank said last week that its funds under management, which stood at €46.9 billion at the end of March, fell by a further €1.3 billion during April and that clients had given notice that another €0.7 billion was scheduled to be withdrawn.

The unit’s performance has remained steady in Britain, Australia and Japan, which account for almost 20% of the business.