Brian Goggin is thrilled with himself. The 52-year-old, who describes himself as a "proud and passionate" banker, is delighted to be finally in charge. Mr Goggin, who was denied the top job two years ago only to be offered it in June following the sudden departure of Michael Soden, says he will work to leave his mark on Ireland's second-biggest financial institution.

"I feel great. It's a tough job, a big job. I was delighted to be asked to do it and I am hell-bent on making a success of it."

He was markedly upbeat in his first public outing to announce a 9 per cent rise in Bank of Ireland's profits to €700 million for the first half of this year. He described the bank's performance as "excellent" but was realistic about the significant challenges the organisation must face in the future.

His immediate priority is to transform the Bank of Ireland group into a competitive, lower-cost operator. He remains coy about how this will be achieved but says he will be a relentless cost-cutter. The bank has promised to inform investors of these initiatives by the end of this year.

Yesterday Goggin would only say that the bank's cost-to-income ratio, which currently stands at 54 per cent, will be reduced to somewhere in the 40 per cent range. The highest ratios exist at its Irish retail operations and in the UK, which would seem to suggest they will bear the brunt of any axe-wielding.

He has promised to deliver a decision on where Bank of Ireland's future direction lies in the UK market shortly. Mr Goggin is examining options including the sale of its Bristol & West business or breaking it up to retain some parts. The bank is also focused on developing its business banking services in the UK and on making a success of the distribution venture it has with the UK Post Office.

The chief executive believes there is enormous potential for the bank in this market and plays down the need to execute a big acquisition to extract substantial profits from this market.

"I believe that our strategy is clear. Acquisitions should always be on the agenda but they must fit in with your strategy. You should be in a position to take advantage of those opportunities when they arise," he explains.

The bank will also be seeking opportunities to develop niche businesses internationally.

The problems being experienced at Bank of Ireland Asset Management remain a concern for investors and for the bank and will be at the forefront of Mr Goggin's strategy. He had overseen this business for the past couple of years and is disappointed with recent events. The loss of €5.6 billion in client funds is relatively small given that it manages assets worth more than €50 billion for 700 clients, but there is no denying it is a blow.

Mr Goggin admitted that a number of US clients who had invested in a specific fund that had failed to yield sparkling investment returns had lost patience with its particular style of investment.

He says the bank's investment style has meant that its funds have been out of step with the market in the past but had proved its worth over the longer term. "BIAM was slated in the 1990s for ignoring the dotcom phenomenon. It withstood those pressures and was vindicated," he says.

The group's problems worsened when a rival poached four of its senior fund managers and triggered the loss of further clients.

Goggin hopes this phenomenon will not be repeated. "When you are running a very concentrated intellectual capital business there is always a risk there will be attempts to try to prise people away. It hadn't happened before. I hope it's a one-off. I would have preferred if it didn't happen," he says

The bank will be hoping to impress its clients with the appointment of Kevin Dolan as head of BIAM. He joins the group from the Paris-based LCF Rothschild Private Equity Partners group. A number of senior fund managers will shortly join the team, he says.

The Bank of Ireland chief believes that one of the group's past failings has been its failure to aggressively execute its strategy and insists this will not be his legacy. "That is what I bring to the party," he says. "My mark on this organisation will reflect itself in how successful I will be in lifting its performance."

Hawaii fund drops BIAM

A Hawaiian state retirement fund this week became the latest US pension provider to ditch Bank of Ireland Asset Managers (BIAM), when it moved $417 million (€323 million) to a US rival.

The Hawaii Employment Retirement System (ERS) board voted this week to drop BIAM after it posted a 1 per cent loss on the money it had invested on the fund's behalf. US bank State Street now has the $417 million account.

BIAM had been on a watch list with the ERS since last February. This meant that the pension fund was not happy with its performance and would jettison the investment manager if it did not improve the return it was getting on the account.

The Irish investment manager has repeated that pattern across the US over the last year. Clients withdrew a total of €5.6 billion from it during the first half of the year.

In December 2003, the San Antonio Police and Fire fund, for which BIAM handled $72 million, placed it on watch, before axing it the following March.

Similarly, two separate Oklahoma teachers' pension funds fired the bank in February and March, removing it from two accounts with assets worth a total of $600 million.

March was a particularly bad month, as US pension funds withdrew almost $725 million from BIAM's management.

However, this was offset by the Florida State Board of Administration's decision to hire it to manage $450 million. But this appears to be the only US public service pension fund that has hired it in 2004.

The lost accounts varied from $2 million up to amounts on the scale of the $495 million that it managed for the Colorado Public Employees' Retirement Association, which it lost last month.

A scheme for New York teachers put it on watch for an account worth $644 million in April. Barry O'Halloran