BONUS BAN 'LIMITS BANK OF IRELAND HIRING ABILITY' - Bank of Ireland chief executive Francesca McDonagh has said pay caps and bonus bans across bailed-out lenders have curbed her ability to make senior hires, leaving an element of risk with her new strategy plan unveiled this week.
In an interview with The Irish Times in London after outlining her vision to investors on Wednesday to increase the group's loan book by 20%, cut €200 million of costs and boost profitability over the next four years, Ms McDonagh said the restrictions have made it more difficult to convince senior outside candidates "to take a leap of faith". "Talk about bankers’ pay is always a sensitive issue, but the reality is that if someone is paid more than you can offer them, it’s very difficult to get them to come and work for you," Ms McDonagh said, noting that Irish banks operating here which were not rescued by the State are not subject to the same restrictions. The Government has limited bankers’ salaries to €500,000 and banned bonuses, although Ms McDonagh was granted an exception when she was hired last year. While Ms McDonagh, chief executive since October, said her new plan, which also involves spending €1.4 billion on an information technology overhaul and restructuring, "is achievable", she added: "I think there is more risk when you are not competitive in terms of how you pay in an industry where banks in Ireland and the UK pay in a different way." Still, Ms McDonagh has been able to hire a chief of staff, a new head of the IT project, and chief marketing director under the limits.
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CREDIT SUISSE SCALES BANK EXPANSION PLANS FOR IRELAND - Credit Suisse has scaled back its expansion plans in Ireland as the bank focuses more of its resources on its chief Brexit locations of Madrid and Frankfurt.
Having suffered a string of high-level departures from its Irish arm recently the bank has been without a local country head in Dublin for six months. However, the Irish Independent understands it has now signed up a replacement to Manish Vekaria, who served as CEO of the investment bank's Dublin branch and acted as the Irish head of its European prime services division. Mr Vekaria quit his post in December last year, leaving Jeff Jennings, the London-based head of European prime services, to shoulder the additional responsibilities. Sources say Credit Suisse will unveil the new hire within the next few weeks. The bank also lost its chief operating officer in Dublin, along with a handful of other top-tier executives. The departures come in the wake of Credit Suisse's curtailed expansion strategy for Ireland, which included considering both the establishment of a subsidiary unit, and the application for a full banking licence. Sources familiar with the lender's local operations said management had envisaged beefing up staff numbers to over 300 and intended to put more business lines into Dublin, including some fixed income and fintech operations - which may have attracted R&D grants from the Government.
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KERRY AIRPORT FEELS BREXIT SQUEEZE - A new arrivals hall is planned for Kerry Airport to meet increased numbers and to allow an expanded departures area with bar and restaurant, its AGM heard yesterday.
But airlines' fears over Brexit is putting a dampener on further connections with the UK, the meeting in Tralee was told. At almost 336,000, passenger numbers through the airport in 2017 were up by 3% on 2016, the Irish Examiner writes. As well as high numbers on the London Stansted, London Luton and Frankfurt-Hahn routes, the important regional routes also saw increased demand. Larger 70-seat aircraft have been introduced by Aer Lingus Regional operator Stobart Air and some 51,000 people flew with that airline through Kerry during the year. Kerry Airport's financial controller Basil Sheerin said as well as the extra capacity, a third flight to and from Dublin on a commercial basis and outside the Public Service Contract was possible. Denis Cregan who was unanimously re-elected to the chair, outlined how operating profit was up in Kerry, from €267,137 in 2016 to €755,748 in 2017. Turnover increased 5.6% to €6.34m. However, the airport was still getting "a considerable amount of funding" in grants and a major source of its profitability was from Government funding, he said.
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GHOSN HINTS AT BACK-SEAT RENAULT ROLE SUGGESTS ALLIANCE PROJECT IS ON TRACK - Carlos Ghosn is likely to step down as chief executive of Renault before his term ends in 2022, the long-serving car boss has told the Financial Times.
Mr Ghosn, who also chairs Nissan and Mitsubishi Motors as well as a global alliance of the three groups, said he did not expect to spend 'four more years' at the helm of the French carmaker. In stepping back, Mr Ghosn would relinquish operational control of the carmaker he has led since 2005, and built into one of the industry's largest players through its partnership with Nissan, and more recently, Mitsubishi. In February, he signed a new contract running to 2022, with the aim of making the alliance between the three carmakers "irreversible". "You can suspect before 2022 I will stop being CEO of Renault," he said in Lunch with the FT interview. The indication that he would step back suggested that Mr Ghosn believed he would have finished the integration, which could include a change to the exiting cross-shareholding structure, earlier than expected.
