Francesca McDonagh to step down as Bank of Ireland chief executive

Executive is expected to join another European financial institution

Francesca McDonagh is stepping down as chief executive of Bank of Ireland after 4½ years in the role.

The bank announced to its shareholders after the close of trading on Tuesday that Ms McDonagh is leaving her role and will also step down from the bank’s board. She will leave the bank by September for, it is understood, another job with another European financial institution.

“A process to appoint her successor will now commence,” the bank said.

"Francesca has been an exceptional chief executive of Bank of Ireland," bank chairman Patrick Kennedy said. "She has driven – with ambition and commitment – a clear strategic focus on transformation, service improvement and business growth."

Ms McDonagh said she leaves the bank “with a heavy heart, I am proud of all that we have achieved”.

Minister for Finance Paschal Donohoe wished Ms McDonagh well and said the bank had "prospered" under her leadership: "She was instrumental in driving a change in culture within the bank, seeing through the IT transformation programme, and also played a key role in helping customers and the country navigate their way through the recent Covid-19 crisis."

First woman chief

Ms McDonagh, a London-born Oxford University graduate who is of Irish descent, was Bank of Ireland's first woman chief executive when she was appointed in October 2017 to succeed Richie Boucher. She previously worked in a variety of senior roles for HSBC.

Within weeks of her arrival at the bank, she was thrust into the middle of the then-ongoing tracker mortgage crisis, after the government summoned the heads of all the Irish banks to meetings to pressure them to resolve the issue for customers who had been put on the wrong rates.

Earlier this month, Ms McDonagh announced the bank's first share buyback since 2004. It has hired UBS to oversee the buyback of €50 million worth of shares. In February, the bank reported a net profit of €1.05 billion for 2021, compared to a loss of €707 million for 2020.

Among the major transactions overseen by Ms McDonagh was Bank of Ireland's deal last October to buy an €8.8 billion loan book from KBC Ireland, as well as taking on its €4.4 billion deposits book. KBC and Ulster Bank are both exiting the Irish market, creating uncertainty for hundreds of thousands of customers.

Salary cap

Ms McDonagh was paid close to €1 million in 2020, the most recent year for which her salary details are available. Irish banks have repeatedly lobbied the government in recent years to relax a State-enforced cap on bankers’ pay, arguing that it hinders the institutions in the search for and retention of talented executives.

Ms McDonagh’s exit comes as the State continues to slowly sell down its stake in the bank by drip-feeding shares into the stock market. Since last summer, the State’s stake in the bank has fallen from almost 14 per cent to below the notifiable threshold of 5 per cent.

Taxpayers have so far received about €6.5 billion for the €4.7 billion that the State stumped up to rescue the bank in the financial crash. Ms McDonagh recently said she expected the bank to be back fully in private ownership by next year.

Mark Paul

Mark Paul

Mark Paul is Business Affairs Correspondent of The Irish Times. He also writes the Caveat column

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