Returning AIB to private ownership would be ‘right’ thing, says former CEO

David Duffy says timing would be down to investor appetite for AIB shares

 

Returning AIB to majority private ownership would be the “right” outcome for the bank, its former chief executive David Duffy has told Inside Business, a podcast from The Irish Times.

Having received a €21 billion bailout from taxpayers in the wake of the 2008 financial crash, AIB returned to the main stock markets in Dublin and London last year when the State reduced its holding from more than 99 per cent to 71 per cent.

When asked if the State should accelerate the sale of AIB shares, Mr Duffy said: “I don’t know that it’s about speed. It’s about when the investor appetite is there . . . but I would always hold to the belief that when it’s right, Allied Irish Banks being in majority private ownership is the right answer for every one of the stakeholders involved.”

Inside Business

Mr Duffy left AIB in 2015 to lead the Clydesdale and Yorkshire banking group in the UK. On Monday, CYBG announced a £1.7 billion (€1.9 billion) takeover of Richard Branson’s Virgin Money.

This would make it the sixth biggest bank in the UK by assets with six million customers. Mr Duffy wants to position the merged entity as a creditable competitor to the UK’s Big Four banks – Barclays, Royal Bank of Scotland, Lloyds and HSBC.

Competition model

“The competition model is changing rapidly,” Mr Duffy said, adding that smaller banks don’t need to bulk up to compete. Instead, it requires “smart partnerships” with fintech companies and other tech groups to compete with the market leaders.

Would the merged entity come to the Republic, where the market is in considerable need of competition? “I couldn’t commit to anything like that,” he said. “What I think we’ll all be doing in two or three years’ time is dealing with a much more existential threat from technology companies in the banking world, and the partnerships that are emerging between big banks and big tech. Rather than expanding geographically, we’ll be looking at ‘are there life-changing partnerships that would make a lot of sense’.”