GOVERNOR'S RESIGNATION:BANK OF Ireland governor Richard Burrows confirmed his resignation yesterday, which means 10 of the 12 chief executives and chairmen in place last September when the Government guaranteed the six main financial institutions have gone or are going.
A former co-head of drinks giant Pernod Ricard who led Irish Distillers for 22 years, Mr Burrows has chaired Bank of Ireland since July 2005 and has been a member of its court of directors since 2000. In the grip of catastrophic loan and share price losses, he leaves an institution whose survival would be in question without extraordinary support from the Government and taxpayers.
Though culturally conservative, Bank of Ireland became a key participant in a speculative lending boom that helped bring its shares to €18.65 when the Irish market reached its height in February 2007. But its shares suffered a brutal decline as international investors started to query the prospects of Irish banks. The stock fell to as low as 12 cent in March, by which stage a €3.5 billion public recapitalisation was imminent.
More State support was on the way in the form of the National Asset Management Agency (Nama) plan – and, with it, the possibility that the Government might take a majority shareholding in the bank. So a 24 per cent rebound yesterday in the bank’s shares provides scant respite to investors.
It is against this dire backdrop that Mr Burrows’s resignation must be seen. “I apologise to our stockholders for the loss in value of their stock and for the cancellation of dividends. Accountability for these losses must be taken at the top and, accordingly, I have informed my fellow directors of my personal decision to stand down from the court,” he said.
It seems likely that the bank will come under Government and investor pressure to appoint an external candidate to succeed him, especially given the controversial choice of long-time insider Richie Boucher as chief executive in succession to Brian Goggin.
Mr Burrows’s counterparts in AIB, Anglo Irish Bank, Irish Nationwide Building Society and the Educational Building Society (EBS) have stood aside in recent months.
Gillian Bowler at Irish Life Permanent is the only chair of a covered institution not to resign since the Government guarantee. Fergus Murphy of the EBS is the only chief executive not to stand down.
