I admit I’m a little disappointed that some of the BoI staff lurking on this site have not offered some insights here. Perhaps when 10 or 15 thousand of you have been laid off thanks to the geniuses who lead you, then we might try to work out where it all went wrong (and which of your leaders should be in the 'Joy)
Clearly Goggin was the winner in 2004 and, contrary to BoI’s media spin, he had no intention of “investigating” the circumstances that had gifted him the top job.
Maybe this is just a story about one greedy banker being shafted by other greedy bankers. But there may be a bigger issue. Was Soden shafted because he upset the applecart? Did his enemies have other plans for BoI which have lead to the current fiasco? Certainly, Soden’s departure was quickly followed by the orgy of foreign borrowings which is at the root of the problems with our banks. It may be that Soden’s departure marked the start of the Irish property bubble.
Clearly, Soden made many enemies within BoI who would have happily shafted him, including the IT guys who ran the audit. Taking free cars and newspapers off management was just not cricket That is always the fate of costcutters like Soden but normally they have the enthusiastic backing of the Board and shareholders.
Mike’s bid for Abbey National was a failure but he was nothing if not ambitious and he succeeded in creating BoI’s link with the UK Post Office:rte.ie/business//2003/1008/boi.htmlMore importantly, BoI’s 2003 results were good and the market was very positive about BoI in the Spring of 2004 [Bank of Ireland shares closed up 29 cent at €10.59 in Dublin.](Bank of Ireland shares closed up 29 cent at €10.59 in Dublin.)While his record was not unblemished, it is clear that Soden was not a lame duck being dispatched by the Board using a neat stunt with the geeks.
My impression is that Soden was the target of a coup at the highest levels, using the geeks’ dissatisfaction. As an outsider, he had ruffled too many feathers. He was a cost-cutter who failed to grasp the rules of the game in a cozy, feather-bedded, duopoly.
The last straw, the issue that may have triggered the coup, was his idea to merge with AIB. This was a bold idea from an international perspective, creating a big Irish bank to compete in Europe and globally, but it was a direct challenge to the AIB/BoI duopoly which had operated so profitably for decades.
Mike never understood Irish banking or, if he did, he thought he could turn into something very different, a force on the European banking scene. He knew that BoI had
and thought he could convert this into an international business. The sorry truth is that these returns were monopoly rents in a country where the banks were above the law. (as demonstrated by the DIRT Enquiry gov.ie/committees-99/c-publicaccounts/sub-rep/default.htm).
When AIB and BoI went outside their turf, they were always liable to fiasco. Step forward John Rusnak.
Mike came out of hiding last October to refloat the merger idea. It may prove to be prophetic, but Soden didn’t envisage a nationalised bank! I’ll bet Soden is willing come forward with further ideas along these lines. We haven’t heard the last of Mike Soden and his shafting may have been a milestone in Irish banking.