After seven years at the helm of AIB, Mr Tom Mulcahy leaves a bank with more branches in Poland than it has in the Republic, Northern Ireland and the UK. It is an international organisation generating around €700 million of the €1.25 billion profits outside the Irish economy. And it has plans for further expansion.
Mr Mulcahy says AIB is determined to expand further in the US and is preparing to complete two acquisitions in the coming months. It has won awards for its small to medium-sized business banking operations in the UK and is content to focus on that market. In Poland, it is positioned to be among the biggest banks and is still weighing up its options as to whether it will become a player in Singapore.
At the same time it remains confident of further strong growth in the Irish economy, which it believes will continue to be a huge generator of profits for the group.
"It has taken us 175 years to go this far. We have good franchises with a lot of potential," Mr Mulcahy said yesterday.
His successor, Mr Michael Buckley's accession to the chief executive's office in July, will mark a new era for the bank, with the focus almost certainly on forging international alliances or mergers to copperfasten its position.
Mr Buckley's experience in Poland, where he headed AIB's operations for the past couple of years, provides him with the contacts and perspective to consider the bank's options in this regard. And he has made no secret of the fact that he expects staff to be willing to travel to work in the group's overseas businesses.
The bank's move into Poland has proven very timely. Mr Mulcahy suggests that any international bank trying to get a foothold in Poland now would find the process very expensive and would be lagging its competitors.
At the end of last year, AIB merged its two banks, WBK and Bank Zachodni, which together have around 8 per cent of the Polish banking market and is the fifth-biggest bank.
There is still a lot of work to be done at WBK to knock it into shape, with potential bad debts of €400 million to be dealt with. It must also integrate the information systems in the two banks to reduce costs and improve efficiencies. Some 45 new branches will be added in the Warsaw area to capitalise on the expanding population.
AIB seems to be shrugging off concerns about the US economy, suggesting that it has dealt quickly with two large potential bad loans and is comfortable with the rest of its book. Some analysts suggest AIB doesn't yet have sufficient scale to achieve strong profit growth on the other side of the Atlantic. Mr Mulcahy has signalled that the bank is preparing to expand its Allied Irish America specialist operations with two acquisitions earmarked to add to its product range and distribution network.
When Mr Mulcahy took over in 1993, the bank was earning profits of €372 million, predominantly in the Irish market. As an international bank, his successor will have to position AIB to ensure it is not left behind or dwarfed by consolidation in the sector.
