Irish Nationwide hopes for new chief within weeks, heated AGM hears

A NEW chief executive could be in place at Irish Nationwide Building Society (INBS) by the end of this month, the company said yesterday.

Speaking prior to the annual general meeting (AGM) at Dublin’s RDS, chairman and temporary chief executive, Danny Kitchen – who took over the day-to-day running of the company at the beginning of May, in the aftermath of former chief executive Michael Fingleton’s resignation – said he hoped by the end of this month either someone would be in place or the company will at least have offered the job to a candidate.

Mr Kitchen – who recently turned down the role himself – said “five or six” people have, to-date, been interviewed. All are external candidates and Irish. The salary cap of €360,000, he said, shouldn’t deter anyone. It “was not the main driver” in his own decision not to take the job.

Mr Fingleton stepped down, after 37 years at the helm – after controversy surrounding a €27.6m pension fund pay-out and a €1m bonus, which he has since paid back.

At the AGM members reacted angrily to Mr Fingleton’s remuneration package last year and the company’s role in lending to Anglo Irish Bank.

Mr Kitchen – who also proposed to shareholders a strengthening of the board by a further three executives (currently there is only one executive member of the board) – explained the bonus related to the retention of Mr Fingleton’s services, rather than a performance-related payment.

Concerning the Anglo loans, he said in hindsight INBS would have preferred not to have loaned the money. However it was “quite proper” as it represented “good profitable business” – although the practice ultimately damaged the society’s reputation.

Regarding the potential for INBS to join a so-called “super mutual” with the likes of the EBS and Irish Life & Permanent, Mr Kitchen said nothing would be ruled in nor out. “The idea of a sale is years away... our plan is to stabilise the business over the next five years, shrink the loan book and to work from there.”

INBS’ results for last year showed a €464m impairment provision for bad loans and a pre-tax loss of €280m. It is looking to halve its commercial property lending activity to 50% of its overall loan book by 2013 and gradually increase its home mortgage business.