AIB CEO David Duffy to step down

David Duffy is to step down from his role as chief executive officer and executive director of state-owned AIB to join the Glasgow based Clydesdale Bank, a member of the National Australia Bank Group.

Mr Duffy (53) is expected to take up the role of CEO with Clydedsale “within the next few months” and will also join the boards of Clydesdale Bank and NationalAustralia Group Europe as an executive director.

NAB group chief executive, Andrew Thorburn said that Mr Duffy joins the banking group at an important time as NAB looks to accelerate its exit from the UK banking business.

Mr Duffy will remain in position at AIB to support the board in identifying his successor. While his final departure date has yet to be agreed, it is expected that he will stay to present the bank’s annual results in March. Mr Duffy briefed the board of AIB about his decision after close of business on Friday.

The board of AIB will now start a process to appoint a permanent successor to the role. A government imposed salary cap of €500,000 has been imposed to date at the bank.

Mr Duffy said that his time at AIB has been “immensely rewarding both professionally and personally” and that the bank is now well positioned “to contribute to Irish economic recovery and to serve customer needs”.

“Having returned to profitability, received approval of the bank’s restructuring plan and passed the recent ECB/EBA Comprehensive Assessment, I believe now is the right time for a new CEO to lead the bank through the next phase of its recovery and growth and a multi-year process of returning capital to the Irish state,” he said.

Minister for Finance, Michael Noonan, praised Mr Duffy’s work at AIB, as he noted that the outlook for the bank “is very positive”.

“Given the significant progress made by AIB under Mr Duffy’s executive leadership I extend my thanks to him for his professionalism and vigour in the role and wish him continued success.”

Dublin-born Mr Duffy joined the bank in December 2011,replacing then executive chairman David Hodgkinson, having held previous roles with Standard Life, ING and Goldman Sachs. In his LinkedIn profile, Mr Duffy writes that his ambition at AIB is to deliver "a profitable, well capitalized bank with a leading market position in all products and sectors".

Mr Duffy initially joined the bank on a three-year contract due to end at the end of 2014, but last June it was disclosed that he had signed a permanent contract with the bank.

AIB chairman Richard Pym said: "I am very sorry to see David leave AIB. During David's tenure as CEO the bank has been transformed from an organisation in difficulty to one which returned to profit in the first half of 2014 and which is well positioned to deliver on its strategic objectives to customers and shareholders. I will work with David in the coming period to facilitate a smooth transition and wish him every success in the future".

Last week the government appointed Goldman Sachs to advise it on how to reconfigure the lender’s capital structure in advance of a possible sell-off. Senior credit analyst with Merrion Capital Ciaran Callaghan said that Mr Duffy’s resignation “is likely to be an unwelcome development in the government’s sales plan”, and highlights the difficulties of retaining a stable management team in nationalised institutions.