ACCBank's new chief executive is firmly focussed on the future. Mr Colm Darling says the bank is determined to learn from past mistakes and is confident it can become a highly attractive takeover target sooner rather than later.

A year ago, Mr Darling's career path was linked to the successful merger and flotation of ACC and TSB Bank. He would have taken up a very senior and potentially highly lucrative role in the Republic's newest public company. But the slide of the value of financial stocks on the markets, coupled with the ultimate failure to reach agreement with unions at both banks, changed all that.

Last week, the Minister for Finance, Mr McCreevy, announced that the merger negotiations were off and charged both banks with drawing up a new strategy which would culminate in their eventual sale.

Mr Darling says ACC is now firmly focussed on designing and implementing a blueprint for change at the bank. Its board of directors discussed the various options which could help to put it on a more commercial footing this week and management is anxious to involve its 600 staff in the arrangements.

"Everybody is disappointed at the outcome but we have to learn from the last year and use that experience to secure a better deal for ACC," he says.

Mr Darling also contends that recent events have, in some ways, made it easier to implement the necessary changes at the bank.

"A lot of time and effort went into the merger. When it was terminated it was disappointing but I think people realised it was becoming laboured. It became a question of getting more control over our situation and starting to shape it," he explains.

"People now recognise the commercial realities we are faced with. There is a sense of urgency about it which is essential to get change in any organisation. The expectation now is that some vision of the future must emerge to ensure the prosperity of the bank."

The new chief executive's task is a formidable one. Staff morale is at an all-time low. Just 12 months ago, there were hopes that employees would be sharing in the proceeds of the bank's flotation to the tune of around £40,000 (€51,000) a piece through an Employees Share Option Programme. Last week, however, trade unions representing ACC's staff were openly accepting there would have to be redundancies.

Mr Darling refuses to be drawn on the potential for downsizing at the bank and is at pains to insist that staff will be kept informed of any developments that will affect their lives.

"We want to have effective communication systems between management and staff to work this time so there will be no surprises. It's clear that people's views will have to change but let's have the kind of relationship where there is trust in the whole process this time."

There has been a long history of tension between trade unions and senior management at ACC. It was the unions which originated the merger proposal with TSB and were successful in pursuing this at a time when management wanted to sell part of the bank to the French bank, Credit Agricole.

This has lead to claims that management lost control of the bank a long time ago - something which the new guard will be anxious to reverse.

"It is now essential that we achieve cohesion in the organisation. In the past there have been problems but we have to look forward and establish the kind of relationship that can allow a healthy stress but let it be constructive. The indications at this stage is there is a willingness to establish this kind of rapport."

Another major problem for the bank is its ongoing investigation by the Revenue Commissioners in relation to DIRT liabilities on bogus non-resident accounts. This investigation stems back to the introduction of DIRT in 1986 and is expected to culminate in a massive tax demand.

As part of the Dail Committee of Public Accounts' investigation into DIRT tax evasion, it has been established that ACC's potential DIRT bill could amount to anything from £1.5 million to £17.5 million. This does not include penalties or interest which may attach to any unpaid taxes and it may be some months yet before its actual liabilities are established.

Mr Darling says the bank is co-operating fully with the Revenue Commissioners in this regard and will fully discharge its liabilities whatever they may be.

"We'll do what we have to do. The reality is that we have got to be able to deal with that bill and meet it from within our capital base." To this end, he says the bank will have to be more disciplined in generating surplus capital going forward.

He accepts it would be difficult for any prospective bidder to consider ACC as long as such a liability is left hanging over it. There is also an onus on the bank to restore public confidence in the organisation as a good corporate citizen.

"There has been changes at board and management level and a lot of initiatives have been adopted to ensure that we don't make the same mistakes we did in the past."

The level of non compliance with DIRT legislation and, indeed, the criticism hurled at the bank's management for its cavalier attitude towards corporate governance standards, highlighted by the PAC, is something the bank now regrets, he says.

"It's a part of the history of ACCBank that we are not particularly proud of. All we can do is draw a line in the sand and say lets look forward and get the business focussed. We must get the bank into a condition that makes a real statement to a prospective party."

He rejects suggestions that the bank has now wasted a year with TSB, saying the merger process had triggered the analysis of the bank's options some time ago and that many of the other options explored then are still viable. "It will probably take us weeks to hammer a strategy into shape. We want to be able to get into a strong bargaining position with a prospective bidder in the future. That is in everyone's interest."

Mr Darling says the Minister for Finance has made a clear decision that the status quo cannot remain and that is being accepted by its entire workforce. "I think that message has been received loud and clear."