I HAD A wry smile on my face listening to a radio announcement last week. Allied Irish Banks were announcing the appointment of their new CEO. His employment history included a stint as a senior officer of ING Barings; he was used to dealing with difficult situations and restructuring and had spent a considerable period of time in Singapore.
After hopping the phone off the wall a few times, trying to work out why my phone wasn’t working and I didn’t get the call myself (joking), I replayed the phrase that ruled me out of the running, ‘a successful period in Singapore’.
The similarities to his Singapore stint don’t necessarily end there. One of the first things that David Duffy, the incoming CEO of AIB, will have to do is implement 2,000 redundancies at the bank. When Duffy joined ING Groep NV in February 1998, the cull of employees from the purchase of Barings Bank was still in full swing. ING purchased the remnants of Barings Bank for £1 in 1995 after my own calamitous actions. As the Head of Human Resources he would have overseen many, if not all of the ensuing redundancies after the amalgamation of those two organisations.
I would have been very much at the head of the list but was dealt with separately by the judicial system. But at the same time there were many Barings employees that simply weren’t good enough at their jobs and were living on borrowed time. Over the next few years a large number of these were let go, possibly by Mr Duffy. As he returns from Singapore and digs into many of the activities of the last decade of irresponsible lending here, I’m sure he will be equally amazed that the number ends at 2,000 and that there has not been one prosecution to date.
Heading AIB will be a difficult task, not least since the position itself has been vacant since November 2010 but there are other incumbent problems. Of the two pillar banks remaining, it was the one more out of control, not observing due process and lagging behind the Bank of Ireland in coming to terms with and correcting the situation. The enormity of unravelling many title issues and investigating the processes under which loans were given whilst not insurmountable will present difficulty.
A chief executive who has no legacy with the situation will see the banks employees for what they are and make clear concise decisions. Many of the redundancies will be voluntary, jumping before they are pushed, but there is no doubt that the first few months in the job will not be pleasant.
Singapore is a wealthy nation – Ireland is the financial equivalent of Skid Row
Having pumped over €20 billion of bailout funds into AIB and EBS, Mr Duffy will have to operate as a bank that is owned by the State. Having most recently worked in Singapore where the state there has a Big Brother type approach to control – where everything and everyone is watched – that will not be a problem. In fact he will probably be able to teach his new bosses a thing or two.
Mr Duffy will have a lot to which to acclimatise. Returning from Singapore to Ireland will not be easy. Both countries look towards the financial markets and the protection of wealth as one of their core industries. Singapore has been far more successful at achieving this. Both countries financial markets lie in the shadow of more successful near neighbours. Hong Kong in the case of Singapore and London in the case of Dublin present those obstacles to growth. Singapore is clearly bridging the gap whilst Dublin never will.
Singapore is a wealthy nation, living in a wealthy neighbourhood and it maintains its own national currency. Ireland on the other hand is on the financial equivalent of Skid Row in Europe with some equally troubled neighbours, having handed over its sovereign powers to a group of more powerful nations. Singapore’s population is growing strongly, passing through the 5 million mark in 2010; Ireland is 100 times the size of Singapore in terms of area but has a considerably smaller population, proportionately speaking. The difference will increase in the next few years, young people are fleeing Irish shores to seek opportunity, many will turn up in Singapore and Australasia.
Mr Duffy clearly wants the opportunity and for that he should be applauded. He is reversing the brain drain away from these shores and returning to confront a problem head on. No longer will he be walking along the pristine clean pathways of Tanglin and Orchard Road, dodging the housewives who kneecap you with their designer shopping bags but he will be plotting a route home to avoid the ever-increasing number of beggars on the streets of Dublin.
We are told by the official AIB communications that Mr Duffy is used to ‘managing banks through challenging times’. That’s good: because he is going to need it.