A potential flotation

of AIB might have to wait until next year, following David Duffy's decision to step down as chief executive to take up a similar role with Clydesdale Bank in the UK.

Mr Duffy’s surprise resignation on Monday has complicated the timetable for AIB beginning the process to return to private ownership.

Given that it is likely to take several months for AIB to appoint a replacement, market sources said yesterday flotation of the bank might have to be pushed back to next year.

However, work to prepare the ground for AIB’s return to private ownership will continue, with AIB believed to have already engaged with Goldman Sachs, which was appointed by the Government last week to advise it on possible capital restructuring actions.

At a minimum, it is expected that a restructuring of AIB’s share capital will be undertaken this year, while actions to clarify the position around the €3.5 billion in preference shares and €1.6 billion in contingent capital notes held by the State are also seen as likely.

Without delay

Minister for Finance

Michael Noonan

met AIB chairman

Richard Pym

to discuss the bank’s plans to recruit a new chief executive. “Mr Pym and I agreed it is in AIB’s best interest that the process to recruit a new chief executive would begin without delay with a view to having someone with the calibre, skills and drive to lead AIB in place as soon as possible,” Mr Noonan said.

It is understood that AIB will appoint an executive search firm to assist the company’s board with its selection process. “Mr Pym has agreed to keep me updated as the selection process develops with a view to being in a position to recommend a new chief executive to me within the coming months,” Mr Noonan said.

Mr Noonan said Goldman Sachs would continue to work with the bank’s management team on developing plans to restructure its capital base and “lay out a roadmap that will see AIB begin to return cash to the State”.

AIB received a €20.8 billion bail-out from taxpayers.