Irish Life and Permanent (IL&P) chief executive Denis Casey said this afternoon he was resigning from his position having earlier received backing from the board of the bank.
The announcement comes after a meeting between Minister for Finance Brian Lenihan and chairman of Irish Life & Permanent Gillian Bowler today.
Following an eight-hour meeting last night the board of IL&P rejected an offer of resignation by Mr Casey over the bank’s €7 billion deposit into Anglo Irish Bank last September.
However, in a statement issued after the meeting with Mr Lenihan this afternoon the bank said Mr Casey had informed the board he wishes to resign from the group.
He will remain as acting group chief executive for a transition period until a successor is found.
"In informing the board of his decision, Denis thanked the board for their support," the statement said.
"However he said that having reflected on the situation with his wife and family overnight and again this morning, he had come to the decision that regardless of the board’s support, his continued involvement with the group would only serve as a distraction from the group’s efforts to successfully navigate the difficult challenges of today’s market," the statement said.
Ms Bowler said she accepted the resignation with the “utmost regret”.
“Denis Casey is a man of the highest integrity and honour. I have always held him in the highest regard as a colleague and as a friend and I know that his decision today — as always — has been prompted by his dedication and loyalty to the company," she said.
After last night's meeting the IL&P board accepted the resignations of the group’s finance director, Peter Fitzpatrick and head of the group’s treasury, David Gantly.
IL&P said David McCarthy, chief financial officer, will replace Mr Fitzpatrick subject to regulatory approval.
Ms Bowler said in an earlier statement relating to those resignations that it was clear the only motivation of the individuals concerned was to support the policy objective of the Financial Regulator and the Central Bank.
However, she said the manner in which specific support was advanced to Anglo Irish Bank during 2008 had been wrong.
"I have absolutely no doubt about the integrity of the individuals concerned . . . mistakes were made - for which I and the board apologise unreservedly,” she said in the statement.
IL&P has initiated a review of its processes and procedures into the events surrounding the Anglo deposit. The meeting of the bank’s board to discuss the unusual back-to-back transaction with Anglo Irish Bank ran early into the morning, having started in the afternoon.
The directors and senior executives at the State’s largest mortgage lender and life insurance company met for crisis discussions on the Anglo Irish transaction yesterday, after Mr Lenihan said he expected the bank’s board to “face up to its responsibilities”.
Minister for Finance Brian Lenihan welcomed Mr Casey's resignation.
In a statement, he said: "Last night I stated that the Board of Irish Life and Permanent must discharge its responsibilities in relation to the serious matters that have arisen. I welcome Mr Casey's decision to resign from his position in the group. This is an essential first step in repairing the reputational damage done to the Irish financial system by this transaction."