AIB's chief executive Michael Buckley is to retire at the end of June, handing over control of the country's biggest bank to his successor, Eugene Sheehy.
Mr Buckley will remain as AIB's representative on the board of M&T Bank, AIB's US associate, until April 2006, although he will stand down from the main board of the bank.
Mr Buckley, who turned 60 earlier this year, was due to retire in February 2006, but following the appointment of Mr Sheehy as his successor earlier this year, AIB had signalled that he was likely to step down earlier from the €1.5 million a year role.
The bank said yesterday that the fact that Mr Sheehy was an internal replacement, "who has over 30 years' experience in a variety of roles with AIB, means that a lengthy transition period is not necessary".
The 50-year old Dubliner, who joined the bank in his teens, was named as chief executive designate in March.
Investors welcomed the announcement of Mr Buckley's retirement date yesterday, saying it was preferable not to have too protracted a handover period. They are now looking forward to meeting AIB's new chief when he presents the bank's interim results in early August.
"There's no point in wasting time. It gives us a chance to meet the new guy and it removes any uncertainty about strategy," one fund manager said yesterday.
In addition to the confusion over strategy caused by the recent news that Mr Buckley proposed a merger between AIB and M&T last autumn, there has been speculation of late of disagreement between the two men over the filling of senior roles within the bank with Mr Sheehy keen to appoint those who will be answering to him.
AIB has yet to appoint a managing director for First Trust, its Northern Irish subsidiary, to replace Dennis Licence, who retires later this year. The bank is also likely to need a new head for its UK operations as managing director Aidan McKeon nears retirement.
However, Mr Sheehy takes over at a good time for the bank. Analysts note that the share price, which closed 1 per cent higher at €17.15 last night, is back at levels not seen since the height of the stock market rally in 1999. It has been driven of late by the prospect of the bank's inclusion in the Dow Jones Euro Stoxx 50.
AIB's closing share price today will determine if it gains entry to the high-profile index, which is used by international tracker and consensus funds keen to get exposure to the euro-zone.
Meanwhile, among the strategic issues facing Mr Sheehy when he takes over the top job at the end of June is what to do with AIB's 23 per cent stake in M&T.
He will also have to deal with greater competition in the bank's lucrative home market following the arrival of overseas competitors such as HBOS, Royal Bank of Scotland and Danske Bank .
Its Northern Irish operation faces a competition probe into the sector, while the prospect of consolidation in the banking sector in Poland means AIB may have to choose whether or not to expand or leave that market.
Although small in a group context, it must also decide what to do with its underperforming life assurance subsidiary, Ark Life.
