Senior AIB chiefs to step down

AIB’s top three directors, chairman Dermot Gleeson, chief executive Eugene Sheehy and finance director John O’Donnell, have resigned in the face of intense pressure to go from the Government and institutional investors.

The dramatic clear-out of the top brass at Ireland’s biggest bank comes in the wake of the resignation of the chief executives of the other banks supported by the Government’s bank guarantee scheme – Anglo Irish Bank Corp, Irish Life & Permanent Plc, Bank of Ireland Plc and Irish Nationwide Building Society.

Mr Sheehy, 54, who said just last month said that he planned to stay in his post for the next six years, will remain in his post until a successor is appointed. Mr Gleeson will leave in July and Mr O’Donnell will retire in August, the bank said.

The three men’s positions became increasingly untenable over recent weeks after AIB effectively failed the Government’s stress-testing procedure, and the Irish Association of Investment Managers chief executive Frank O’Dwyer told Mr Gleeson of his members’ concerns about the bank’s handling of the crisis.

AIB’s share price rose 18.5% yesterday to 96c after the announcement, giving the bank a market value of €847.5m. The stock has lost 93% in the past 12 months.

Mr Sheehy was the last man standing among Ireland’s banking executives and until yesterday he was the only Irish bank chief executive to have kept his job.

However, when AIB conceded earlier this month that it needed to raise an extra €1.5bn in capital – on top of €3.5bn in capital from the National Pensions Reserve Fund – and when it put a “for sale’ sign on its US and Polish banking operations, the fate of the trio were all but sealed.

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