A former county hurler, the Kilkennyborn head of AIB corporate banking now swings a golf club to let off steam. On a sunny January morning with a hint of spring in the air, AIB's share price has peaked again, reaching £13.86 (€17.60), while Tom Barry's immediate claim to fame is to have contributed to the first euro-denominated takeover deal, and the biggest buyout in the Republic. AIB corporate banking partly funded the £578 million management purchase of Cantrell and Cochrane to the tune of £150 million, made up of debt and mezzanine finance.
He says similar amounts of funding have been advanced before, such as for the Fyffes acquisition of the Central American banana business, Geest, Kerry's acquisition of the food ingredients business, Dalgety, and Fitzwilton's purchase of Wellworths, the supermarket chain.
"We have surplus cash and we have surplus liquidity. That is not a limiting factor, it is the number of deals that are available that can justify a level of finance of over £100 million," he says.
Before graduating in agricultural science from UCD, he grew up in a family of five on a farm in Windgap near the Tipperary border. It is an upbringing which, he believes, instilled him with a strong work ethic. He was expected to do jobs after school. "It was taken as a given," he says.
He boarded in St Kieran's College in Kilkenny, describing the school as the same to hurling as Blackrock is to rugby. He played for the Kilkenny minors, under-21s "and a little for Kilkenny seniors", carrying a Leinster senior medal and an all-Ireland under-21 medal as souvenirs of that time. While agricultural science was "probably a normal progression" he says that by the time he finished his degree he was oriented more towards "business and finance and economics". As a result, he did a Masters in Business Administration in Trinity College.
His thesis on "the usefulness of financial ratios to corporate lending policies in assessing business loan applications" proved to be fateful. "It was not a show stopping number in the university pub," he admits.
But he did build up some contacts while interviewing bank managers on their lending policies, while coming to the conclusion that "the cash flow statement was the key driver on the financial assessment".
"That was a much better indicator of financial performance than the financial ratios. After 22 years of banking, I would still agree with that conclusion."
He did a two-year stint in Price Waterhouse, before being asked by one of his old contacts to join AIB's merchant banking arm of the time, Allied Irish Investment Bank (AIIB).
He has been head of corporate banking since last August, having been director of the financial products group for the previous two years. In that role he explored how the bank could go with ideas to corporate customers rather than the other way around.
"Basically what we saw was that financial directors were getting more sophisticated. There was more competition from London, and we needed to be more creative and innovative in our responses."
He gives the example of a $25 million (€21.6 million) German-Irish lease deal put together for an aircraft asset in the past year.
He says he got the job as head of AIB corporate banking through his knowledge of the business, a customer focus and "a strong energy and enthusiasm to grow the business". "The success of a corporate banking business is quite dependent on bringing other specialised unit products to the same customer business. For example, treasury, fund management, the corporate finance advisory service, all part of capital markets." His section has assets of £3 billion and is also responsible for corporate banking in Britain. The teams based in London will be focusing more on deals within the euro zone.
He believes that with five-year fixed euro interest rates as low as 4 per cent, fantastic opportunities exist.
"It always surprises me how few companies will take the bird-in-the-hand opportunity of five-year fixed rate money without any risk of increased cost, and forego the marginal opportunity of further interest rate reductions."
He is aiming now to move forward some of the ideas developed in financial products, bringing more innovation to the business and aiming increasingly at the newly created euro zone, focusing on acquisition finance and project finance, and building relationship teams.
"I think there is a need going forward to move from traditional lending thinking to more of a consultancy approach, which is more knowledge based."
He expects the Irish economy to continue to be "very positive". "I think the international inward investment companies have provided a huge impetus in terms of their own activities, and the spin-off business for the myriad of Irish businesses who provide them with products and services."
He says that a medium term pressure is a downturn in the US economy putting pressure on those multinational companies. "But there is no sign of that at the moment. The US economy seems to be robust and resilient to a number of international shocks."
Within the indigenous sector, he points to the move towards public-private partnerships as providing investment opportunities. The Government has study groups established to introduce the concept as a major departure in developing infrastructural projects. "There is quite a risk transfer. A private sector consortium puts a fixed price on building and managing, and hence a fixed price on providing the service to the public sector." Outside the euro zone, AIB Group's 60 per cent in the Polish bank, WBK, gives the corporate banking section a foothold in a developing economy. It has already contributed to funding the construction of a 116 megawatt gas-fired electricity station and recently hosted a seminar outlining the benefits for Irish companies of investing there.
He believes that of the former Eastern bloc countries, Poland has, with 38 million people, "the biggest potential".
"We see very good medium to long-term potential. It is a country that has responded extremely well to the free economy," he says. He describes himself as having an open manner with the 170 people in the section and emphasises his customer-focused approach. His success will depend on an ability to motivate the staff "and to develop a good energetic team".
"I think success in business is 90 per cent about energy, common sense and a bit of personality, rather than being a rocket scientist."
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