NTMA picks Frank O’Connor as next chief executive

The National Treasury Management Agency (NTMA) has selected internal candidate Frank O'Connor as its next chief executive, at a time when euro-zone government borrowing costs are creeping up from record lows amid concerns about a spike in inflation.

Mr O’Connor (53), currently the NTMA’s director of funding and debt management, will succeed current incumbent Conor O’Kelly on July 1st, the agency said in a statement on Tuesday afternoon, confirming an Irish Times report on the appointment earlier in the day.

Prior to joining the agency in 2010, Mr O’Connor held a range of executive and senior management roles, including head of trading in AIB’s primary dealer bond unit in the late 1990s. Between 2004 and 2010 he led wholesale treasury at AIB’s then Polish unit Bank Zachodni WBK, before its takeover by Spain’s Santander.

‘Exceptional combination’

“Frank brings an exceptional combination of strong financial markets experience, developed both in Ireland and internationally, and deep knowledge of the agency and its wide range of specialist mandates to manage assets and liabilities on behalf of the State,” said NTMA chairperson Maeve Carton.

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Having spent his first few years with the NTMA as head of treasury for the National Asset Management Agency (Nama), Mr O’Connor joined the agency’s funding and debt management unit in 2012 as the Irish government returned to international bond markets about 18 months into an international bailout programme. Mr O’Connor became director of the division in 2014.

The appointment comes as the NTMA plans to raise €10-€14 billion in international bond markets next year, marking a decline of up to 46 per cent on the amount raised this year as the Government’s Covid-related spending eases.

The agency sold €42.5 billion of bonds since early last year as the Government grappled with the costs of funding supports for households and businesses during the worst of the economic shock. It will leave general government debt at a record level of almost €237 billion at the end of 2021, according to Department of Finance forecasts.

Borrowing costs

Euro-zone government borrowing costs have also begun to creep up in recent months – albeit off ultra-low levels – as bond investors speculate about when the European Central Bank (ECB) will move to hike interest rates and wind down its bond-buying stimulus, amid a spike in inflation.

While ECB president Christine Lagarde confirmed last week that a €1.85 trillion pandemic bond-buying programme will come to an end in the coming months, the organisation plans to expand a pre-existing bond-purchase programme to ease the transition.

The yield on Ireland’s 10-year bonds have picked up from a record low of minus 0.33 per cent last January to 0.06 per cent. Still, they remain a tiny fraction of the 14 per cent yield investors were demanding to buy Irish 10-year bonds at the height of the financial crisis a decade ago.

Other key areas under the NTMA’s remit, which has grown extensively in its 31 years of existence, include the State Claims Agency, which is managing more than 12,000 active claims against State bodies, with an estimated outstanding liability of more than €4 billion, and the €9 billion Ireland Strategic Investment Fund. Nama was also set up in 2009 under its aegis.

The Department of Finance’s banking head, Des Carville, was among the final candidates in the running for the top NTMA job, according to sources.

Nama chief executive Brendan McDonagh, the head of Home Building Finance Ireland Dara Deering and Andrew O’Flanagan, director of the agency’s National Development Finance Agency and NewERA units, had also thrown their hats into the ring, they said.