AIB has announced the appointment of Bernard Byrne as its chief executive with immediate effect.

Mr Byrne succeeds David Duffy who will step down as CEO and executive director from the bank. Mr Duffy's decision to leave was previously announced in January. 

Bernard Byrne, 47, joined AIB in May 2010 as Group Chief Financial Officer and as a member of the Leadership Team.

A chartered accountant, he worked at the ESB and PricewaterhouseCoopers before joining AIB. 

Since 2011, he has held a number of roles at the bank and took up his current role as Director of Retail & Business Banking earlier this year.

"Bernard is the ideal candidate to succeed David Duffy and to lead the organisation forward", commented AIB Chairman Richard Pym.

"Having been one of the leading architects of AIB's customer-led strategy over the last number of years, Bernard is very well positioned to ensure that the momentum created by David Duffy and the senior management team is maintained," Mr Pym said.

"He is ideally suited to the task of continuing AIB's delivery of its strategic objectives for customers and stakeholders," the bank chairman added. 

David Duffy is stepping down to take over National Australia Bank's troubled UK business, which he will try to revive ahead of a planned sale or stock market listing. 

In a statement, the bank said that Mr Byrne's remuneration package "will be fully in line with Government requirements". Bank executives here are subject to a Government-imposed salary cap of €500,000. 

Minister for Finance Michael Noonan said last month that he would wait until the bank's half-year results before deciding on the timing of selling a minority stake and that November was the earliest date for a possible initial public offering (IPO).  

The Government sold a 25% stake in the smaller Permanent TSB in April in a share offer priced at the top of the range, a key test of appetite for 99% State owned AIB.  

Mr Byrne takes over after AIB, like most Irish banks, returned to profit for the first time since the 2008 financial crisis last year as Ireland's economy grew faster than any other in the euro zone.  

AIB said earlier this month that it remained profitable in the first quarter of this year after clawing back more money put aside for bad loans.  

But Irish banks have struggled to grow their loan books with repayments and redemptions among heavily indebted lenders exceeding new lending. 

Central Bank Governor Patrick Honohan warned yesterday that the banks' return to profitability was modest and dependent on provision write backs, and that the crisis continued to have serious legacy issues.

Mr Byrne will also have to navigate the political and public pressure the banks have come under to cut mortgage rates deemed too high by the Government, which last week threatened to penalise lenders if no action is taken. 

AIB is so far the only bank to announce a rate cut.

The bank nominated Mr Byrne to take over as chief executive a number of weeks ago, but had to wait for approval from the European Central Bank's new Single Supervisory Mechanism for the appointment.

IBOA welcomes appointment of new AIB CEO

IBOA General Secretary Larry Broderick has welcomed the news of the appointment of Bernard Byrne as AIB boss.

Mr Broderick said that there had been a vacuum at the top of AIB since January when David Duffy announced his intention to leave. 

"The confirmation of Bernard Byrne ensures that this period of uncertainty has been brought to an end," he said.

"Our members will be gratified that the new CEO will be able to hit the ground running - not only in terms of the major strategic issues facing the Bank but also in recognising the considerable sacrifices made by AIB staff in transforming the Bank’s prospects," the IBOA secretary general said. 

"As Bernard Byrne has been centrally involved in these developments, we hope that this experience will inform his new leadership role," he added.