Former AIB executive plots bank IPO in Portugal

Mark Bourke, the former AIB chief financial officer (CFO) who was instrumental in preparing the bank for its €3.4 billion initial public offering (IPO) in 2017, is dusting down the playbook.

The Irish man was hired 3½ years ago to become CFO of Portuguese lender Novo Banco, which emerged from the ruins of Banco Espirito Santo after the lender’s collapse in 2014. In August, he became chief executive of the bank, which is 75 per cent owned by US private equity giant Lone Star.

In a recent interview with Reuters, Bourke said he is planning for Novo Banco to be ready for an IPO when public equity markets, which are under the cosh, open up again for listings.

The bank’s balance sheet is in a much stronger position than when Bourke joined, with non-performing loans having fallen to 5 per cent of total loans as of September from in excess of 20 per cent in March 2019.

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“The major part of the job is done. But we need to be looking at the European average, which is in the 2.5-3 per cent range ... in the short to medium term,” Bourke told Reuters. The NPLs ratio at AIB, incidentally, is now under 4 per cent — down from about 35 per cent when Bourke joined AIB in early 2014.

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Novo Banco posted its seventh straight quarter of profitability in the three months to September. Its net profit for the first nine months of the year tripled to €428 million on the same period in 2021 and the bank, according to Bourke, is generating decent capital reserves. Rising interest rates are also helping its net interest margins.

Bourke is among a series of Irish banking departures in recent years amid ongoing pay and bonus restrictions. There are no signs of that changing any time soon.

At Novo Banco, in which the Portuguese banking resolution fund has an almost 25 per cent stake, Bourke was part of a six-person executive team that secured up to €1.6 million of conditional bonus awards last year.

Even bigger awards likely await should Bourke get an IPO away.