Banking sector blindsided by Richie Boucher retirement

Highly regarded chief executive led Bank of Ireland out of post-bailout wilderness

Richie Boucher: variously described as driven, committed, focused, resolute, and hardworking. Photograph: Aidan Crawley

Richie Boucher: variously described as driven, committed, focused, resolute, and hardworking. Photograph: Aidan Crawley

 

Given his age (59 in August), length of service (14 years, eight as chief executive) and the fact that Bank of Ireland has embarked on a substantial programme of investment to transform its IT systems for the digital age, Richie Boucher’s retirement announcement shouldn’t have come as a surprise.

However, his stature within the banking industry here is such that his decision to stand down as chief executive of Bank of Ireland still raised eyebrows.

Boucher is the last of the pre-crash senior banking executives left standing here. His appointment as chief executive in February 2009 to succeed Brian Goggin was controversial but he pressed on regardless, managing to remain outside the Government’s €500,000 salary cap.

In his first year in charge, Bank of Ireland recorded an underlying loss of €2.9 billion as a result of a €4 billion impairment charge on its loan book.

Bank of Ireland is often described as the least worst of the Irish banks. Boucher managed to keep the company out of majority State ownership in 2011 by raising €4.2 billion in equity capital from a consortium of investors, including Wilbur Ross (now the US commerce secretary) and Prem Watsa of Fairfax.

At that stage, Ireland was already in a EU-IMF bailout programme and Bank of Ireland’s success in attracting these investors is now regarded as something of a turning point for the State in terms of our recovery story.

Mr Fix-it

Some people credit Boucher with saving the bank, but that would be overstating things. The Government and taxpayers saved the company with the bank guarantee, and €4.7 billion in bailout cash.

Boucher repaired the bank and put it back on the path to normalisation. It returned to profit in 2014, exited its EU restructuring plan last year and is on target to resume dividend payments. It is the only one of the bailed out banks here to have repaid its capital in full.

The Zambia-born executive wasn’t afraid to take contrarian views on populist issues around mortgage interest rates and arrears. He refused to countenance mortgage debt write-offs, arguing that it was shareholders’ money not his, and he wasn’t interested in the Central Bank’s preferred option of split mortgages to deal with home loan arrears.

Boucher also refused to bend to political pressure to lower the bank’s variable interest rates, preferring instead to promote fixed rate mortgages, on the basis that they carry less risk for the bank.

He is variously described as driven, committed, focused, resolute, and hardworking – a man who is first in to the office in the morning and the last to leave at night.

Recovery from illness

In 2014, he battled cancer in his colon and bowel. By his own admission, he wasn’t a model patient, trying to run the bank from his hospital bed when he should have been focused on his recovery. Thankfully, he has recovered well from the illness.

His appointment last year to Greek bank Eurobank Ergasia, where Wilbur Ross is a shareholder, was a signal that he was looking to the future.

He was due to retire at 60, which he will hit in August 2018. There was mild surprise that he didn’t remain in situ to oversee a first dividend payment since the crash but this might be the right time to go.

Bank of Ireland has embarked on a major investment programme in its technology systems as it gears up for the digital age. It’s a new phase in the bank’s development and probably the right time for a change of leadership.

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