BANK OF Ireland has confirmed that Pat Molloy, a former chief executive of the bank, will succeed Richard Burrows as governor next month.

However, contrary to earlier indications this week, Mr Molloy will not be installed as a Government-appointed director under the terms of the State’s €3.5 billion recapitalisation of the bank.

The bank said that during the process to select a new governor, it was advised that Mr Molloy was to be appointed as a director representing the Minister for Finance.

“Arising from the selection of Mr Molloy by Bank of Ireland as governor, the Minister will now make an alternative appointment,” the bank said. The Minister welcomed Mr Molloy’s appointment in a separate statement.

The bank said Mr Molloy had been co-opted on to the bank’s board, known as the court, with immediate effect as governor designate and would succeed Mr Burrows after the bank’s annual general court (meeting) on July 3rd.

The Government has appointed two directors to the bank under the State guarantee and will appoint a further two directors under the terms of the National Pension Reserve Fund’s €3.5 billion investment in the bank.

Mr Molloy (71) served as chief executive of the bank from 1991 to 1998 and later as a non-executive director until 2001. The bank said Mr Molloy led the bank “out of its difficulties” in the US and an investment in First New Hampshire Bank, and property losses in the UK. Mr Molloy was a non-executive director of CRH from 1997 to 2007, Eircom from 1999 to 2001, and Waterford Wedgwood from 2002 until its receivership this year. He was chairman of Enterprise Ireland from 1998 to 2008 and CRH from 2000 to 2007.

Mr Molloy said he had “great confidence in the underlying strengths of Bank of Ireland”. He said he was “determined to do everything I can to guide it through these difficult times” and to meet the requirements of customers and support economic recovery.

“This will enable us to restore value for our stockholders, who have suffered greatly in recent times,” he said. Mr Burrows said Mr Molloy’s banking experience qualified him as “particularly suited to this role in current difficult circumstances”.