No one takes any pride in State bailout, says Doherty

AIB RESULTS:COLM DOHERTY shoots from the hip. He needs to, given the losses AIB has posted and the extra capital it needs, but also because of his promotion from within the bank in a controversial internal appointment to the top job at the struggling concern.

Despite his clear frustration at being unable to provide clarity on the bank’s future due to decisions outside his control, he put in a strident and frank performance in his first results presentation as managing director of the bank.

Doherty awaits the European Commission’s view on the bank’s restructuring plan, Nama’s view on how much it will pay for €23 billion in loans from AIB, and the Financial Regulator’s view on capital thresholds for Irish banks.

This doesn’t stop him outlining his view of what’s needed. He wants to raise capital privately first through “self-help options” – by selling businesses or restructuring debts – and then from investors in a rights issue. If that doesn’t yield enough, he will turn to the Government again.

Doherty uses the phrases “I am about” and “we are about” a lot when explaining how he and his new team plan to fix AIB. Banks live in “an uncertain world”, he says. “Excepting that, I am clear of what we need to do and I am about doing it, and doing it in 2010.”

Analysts have taken comfort from the fact Doherty has a plan, even if the market didn’t. AIB rose two cent to €1.02, valuing it at €900 million – about a quarter of what it’s thought to need in capital.

AIB’s problems arose because it was run as “a siloed business”, he says. As a director of AIB, his concerns about the heavy concentration in land and development were “well known” at board level.

He defended his former role as head of capital markets, saying he ran that unit profitably for a decade, showing he understood how to manage credit and risk.

He’s also precise, and willing to pull someone up on a perceived error – something to which his reputation attests. At yesterday’s media briefing, he pointed out to a reporter that, on December 2nd – the date he took charge – the season was winter, not autumn, as was suggested in the question.

Asked whether the taxpayer deserved an apology for the support shown to AIB, Doherty said the bank would repay the Government its €3.5 billion, that it does not pose a default risk under the State guarantee, and that Nama was a form of industry-wide support that many countries had introduced.

“Nobody takes any pride that the State is having to effectively bail out the banks. We have apologised on many occasions and I will apologise again to the taxpayer for the record for having put the State in that position.”