Sheehy vows to stick to long-term plan

IN his first major statement about his plans for that AIB Group, new chief executive Eugene Sheehy said yesterday he had no intention of trying to reinvent the wheel.

Speaking after he announced very strong half-year results, Mr Sheehy - who had volunteered to go to the US to sort out the bank’s Allfirst subsidiary after the John Rusnak rogue trading affair - had little to say that was controversial.

“I think I understand what the organisation’s strengths and weaknesses are. I’m very proud of it; proud to be an employee and I’m proud of my colleagues and what they have done,” he said.

He added that AIB is well-organised, committed to Ireland and the community it serves: “I think it’s a very important part of the Irish economy.”

Asked on the future direction of the group under his leadership, he said: “I believe the strategies are all sound, based on long-term debate and consideration within the bank.”

Most of those strategies have a 10-year view of the world and for somebody to come in and reinvent what has already been soundly debated and thrashed out would not be a good thing to do, he said.

“These results are testimony to the strategy and to the execution of that strategy. Every bank has strategies and they all probably read quite similar. It comes down to how they are executed“, he said.

Mr Sheehy was unambiguous on his position. He sees the job ahead as delivering on the strategy already in place.

“I think AIB’s core competence is that it has strategies and it executes them well. And that’s down to the people - the quality of the people.”

One challenge facing the group is its struggling life and pensions business, which has failed to perform in line with rivals.

Mr Sheehy said it was one part of group strategic thinking that remained to be resolved. But he said there would be no rush to have a revamp in place to capitalise on the monies coming onto the market from SSIAs when they begin to mature next year.

There is more than Ireland involved here, he added. He pointed out that 10,000 of AIB’s 24,000 staff are employed outside Ireland but are a key part of the bank. Many British-based staff have been working for the bank for over 30 years. Around 2,750 people are employed across the North and Britain.

On M&T, the American regional bank that took over Allfirst and in which AIB now has a 22% stake, Mr Sheehy said shareholders were doing well from AIB’s investment. “That’s my job - to make sure the shareholder does well,” he said.

He rejected suggestions from analysts that the €2 billion plus he would get for selling off the minority stake in M&T could be put to good use elsewhere. His predecessor, Michael Buckley, repeatedly played down suggestions that AIB would end its involvement with M&T.

However, Mr Sheehy pointed out that the group’s businesses were most likely to be grown organically.