First Active's chief financial officer, Mr Cormac McCarthy, will become the group's new chief executive. Mr McCarthy (37), who joined First Active in 1999, succeeds Mr John Smyth who resigned last February. His appointment follows a lengthy search for a chief executive to lead the troubled former building society.

Mr McCarthy is well-regarded and his appointment is a welcome development, although market analysts had been hoping that an external candidate would bring fresh management skills to bear on the organisation.

Mr McCarthy is an accountant and previously worked at Woodchester and the accountancy firm KPMG. His role at First Active has involved financial control, financial planning and investor relations.

The search for a chief executive was delayed by the failed merger negotiations with Anglo Irish Bank. If that deal had been concluded, Anglo Irish Bank chief executive, Mr Sean Fitzpatrick, would have assumed the chief executive position within the enlarged group.

Those negotiations were terminated in May following a poor reception for the deal in the stock market and a dispute over the make-up of a new board of directors.

First Active chairman and acting chief executive Mr John Callaghan began the search for a chief executive after the collapse of these talks. The company will not disclose the level of interest the job attracted and the recruitment process was handled by KPMG.

Mr McCarthy, who is from Dublin, will assume the chief executive role on August 1st. Announcing the appointment yesterday, Mr Callaghan, said he is uniquely qualified to lead First Active into the future. "He is an outstanding executive with a strong financial services and commercial background and has played a pivotal role in the recent developments and restructuring of First Active. His intimate knowledge of the business will be a key asset in our future development," he said.

First Active shareholders will be hoping Mr McCarthy can drive the company forward and contribute to a recovery in it share price. First Active shares were 10 cents higher in Dublin yesterday closing at €1.85. At these levels the shares are still substantially below the flotation price of €2.79 when the building society converted to a public company in October 1998.

The company's share price has suffered, in line with other Irish financial stocks, but it is its over-reliance on the increasingly competitive mortgage market which has weighed heavily on the stock. First Active has taken steps to reduce its cost base in recent months closing branches and reducing staff numbers.