The Minister for Finance expected to have married off at least one of the State banks by now and was looking forward to another day out in May. But in just two months such hopes have been well and truly dashed, leaving Mr McCreevy with little option but to send ICC, ACC and TSB for a makeover in a last ditch attempt to get them off his hands.
The Minister has ordered the three banks to take a long hard look at themselves. The suggestion is that by going on a crash diet and smartening up their general appearance, there would be plenty of suitors. ICC's coming out was a huge disappointment and sent a signal to the Government that it had overestimated the value of its banks. Despite indications that up to 10 financial institutions were actively considering making a bid for ICC, Bank of Ireland emerged as the only contender.
On learning that its enthusiasm was not matched by its competitors, Bank of Ireland quickly cooled its ardour and boldly told the Minister for Finance it would only buy the bank at a knockdown price.
It ultimately offered £250 million (€317 million) for ICC, which was £100 million less than the Government-appointed advisers had been seeking and was considered nothing short of an insult. The Minister pulled the plug on the deal and reeled ICC back into the fold.
This week, the Minister has had to announce the breaking-off of another engagement, with news that ACC and TSB would be going their separate ways. In this case, irreconcilable differences could have been cited as the reason for the breakdown. Yesterday both banks were openly saying it was better to have called off the proceedings now rather than allowing the affair to continue aimlessly.
Both sides accept that the initial proposal was a good one and made sense for ACC and TSB banks. It had been envisaged that the two banks would merge, float on the Dublin and London stock markets in May and become a significant force in the Irish financial services sector.
The canny TSB - which had been engaged twice before - stipulated that the merger and flotation must happen on the same day or it would back out of the deal. Eventually it was this issue which proved to be the sticking point.
While all parties had been working hard to bring about a union in May, both sides were harbouring grave doubts. ACC staff were perceived as being the more difficult and demanding while the TSB was keen not to be outdone in any aspect of the deal by its prospective partner.
Ultimately, it was the announcement by Mr McCreevy just before Christmas that the flotation and merger would not happen simultaneously that sounded the death knell for the project.
And, while the tortuous negotiations continued, the Irish financial services industry was undergoing the most radical and rapid transformation.
Banks and building societies here got their first real taste of competition with the arrival of Bank of Scotland in the mortgage market and the British Northern Rock bank in the savings sector.
Aggressive price cutting became the order of the day and suddenly the businesses of small banks like ACC and TSB were coming under attack.
In an environment where profit margins throughout the financial sector were being squeezed, bank stocks fell out of favour with investors. The appetite for yet another Irish financial stock waned and, instead of risking a failed flotation, the Minister decided to delay indefinitely a stock market debut for Newbank, the working title for a merged ACC/TSB.
This was the worst-case scenario for both banks and their directors swiftly decided it was time to call it a day.
ACC and TSB are now back on the shelf alongside ICC. How long they remain there is largely up to themselves, although their relatively small size in a market where big is better is a significant problem. TSB is slightly the larger, with an estimated 5 to 6 per cent share of the personal banking market, compared to around 4 per cent for ACC. The TSB has a higher proportion of deposits while ACC has managed to gain a small presence in the commercial sector in recent years. Both have high street networks in key locations.
TSB and ACC banks will issue full-year results in the coming months and these figures will give some indication of what they might fetch in the current environment. The key statistics will be the extent of growth in their overall business during the course of the negotiations and the impact of tighter margins on profitability.
TSB is due to outline its full-year performance in March. Last year the bank revealed a 12.5 per cent rise in pre-tax profits to £20.4 million and will be expected to show a strong improvement on this out-turn.
ACC's figures are due in April. It has already issued figures for the first six months of the current financial year and predicted further strong growth in the following months. In August, it announced an 11 per cent increase in pre-tax profits to £11.5 million and will be hoping to sustain that performance over the full 12 months.
Almost all the major financial institutions here will begin to consider whether all or part of these banks might make sense as a potential acquisition. Some analysts suggest TSB is more saleable than ACC at this juncture, with a group such as Irish Life & Permanent likely to look at buying it regardless of whether it manages to acquires Ulster Bank.
As a mutual company, TSB is also seen as a natural partner for the EBS building society. Indeed both sides flirted with this notion some time ago but nothing came of it.
ACC's biggest problem is its baggage. Just last year the bank's senior management performed poorly at the Dail Select Committee of Public Accounts inquiry into DIRT evasion and the bank was severely reprimanded for its sins in the subsequent report. Any potential partner would also have to consider that the bank still faces a hefty bill from the Revenue commissioners in relation to unpaid DIRT dating back to 1986. This tax demand could eventually be for anything between £1.5 million and £17.5 million and is still being investigated.
For its part the bank is keen to show that it is now under new management. This week Mr Colm Darling was appointed chief executive while Mr Padraic O'Connor will remain as the bank's chairman. Next week a full management team will be put in place, charged with shaping the bank's future.
It has become immediately obvious that downsizing will be a priority for both banks and a voluntary redundancy package will have to be considered as a priority.
The Minister has decided not to impose a deadline for ICC, ACC and TSB to come up with a viable alternative to the failed proposals although time is not on their side.
ACC and TSB have both effectively wasted a year on the ill-fated merger process. In that time, they have failed to invest in new technology and to develop Internet banking services. Their core businesses have also come under pressure and, while TSB has linked up with Superquinn to form Tusa, an in-store financial services provider, innovation has been largely lacking.
The Minister has handed down a huge challenge to the management of these banks. They will have to be innovative and brave to ensure ICC, TSB and ACC find suitable partners.
But the Government will also have to play its part. It is clear that it can no longer impose unrealistic conditions to the sale of State assets. At the end of the day, Mr McCreevy will only be called upon to give away his charges once they are put on a sound commercial footing.
