B of I shares rise as appointment pleases market

The newly appointed Bank of Ireland group chief executive may have been appointed with some speed - the decision was announced within six days - but he will be given plenty of time to prove himself, according to fund managers.

They say the markets had reacted very positively to the bank all week in anticipation of his appointment, which was announced on Thursday night.

The share price closed at €10.60 yesterday, up from €9.93 at last Friday's close, a rise of close to 7 per cent since the sudden resignation of former chief executive Mr Michael Soden last weekend.

"Brian Goggin has been meeting investors consistently since as far back as 1998," said one fund manager. "He is very well-regarded in the market."

Several fund managers said yesterday that Mr Goggin would probably opt to continue the bank's current strategy of organic growth, examining mergers and acquisitions where appropriate, driving down the cost base and managing the bank's balance sheet, including share buybacks etc.

"I would say there will be no departure from the bank's current strategy," said another fund manager.

"At presentations, they go through the same four areas - organic growth and so on - which they see as their strategic focus."

One manager pointed out that, although the share price has risen this week, supported by strong volumes, it comes at a time when bank stocks have been strengthening.

"We will see what his \ style and strategy is over the next couple of months," says Mr Noel O'Halloran of KBC Asset Managers, adding that Mr Goggin would be given time to enunciate his vision of the future. "His appointment has not been negative to the group."

Mr Soden had made some moves - including the aborted takeover attempt of Abbey National in Britain and suggesting that AIB and Bank of Ireland merge - which had not endeared him to investors.

"Bank of Ireland seems to have given up on doing a 'transformational' deal," said one source.

Fund managers expect future growth to come mainly from the bank's Irish and British operations.

Last October, Bank of Ireland announced it would invest £125 million (€187 million) in a 10-year joint venture with the UK post office to sell personal loans and other products through the post office network.

"Very soon the bank will have some real numbers from this project to consider," said one fund manager. "It will be interesting to see if Mr Goggin continues to have the same enthusiasm that Mr Soden showed for the deal."

In the meantime, fund managers say that Mr Goggin will do what investors want any chief executive to do - deliver solid earnings growth.