Bank of Ireland €1bn tech plan to strengthen acquisition clout
Richie Boucher reiterates commitment to the branch network despite costs, writes Samantha McCaughren
AN investment of up to €1bn in technology by Bank of Ireland will bolster its ability to pursue acquisitions, according to chief executive Richie Boucher.
At present, 50pc of the bank’s operations are in Ireland, 40pc in the UK and 10pc in the US and Europe.
“You can’t contemplate material acquisitions unless you have the IT systems that support that,” Boucher said in an exclusive interview with the Sunday Independent.
“We always look at opportunities,” he said.
“Our IT investment gives us an optionality. If you’re thinking of making an acquisition, I think key to it is having the IT capabilities that could enable you to integrate that with your systems,” he added.
“I’m not saying it is designed to do that. It’s a sine qua non for being in the business and therefore even having the potential to think about acquisitions.”
He said that the IT project would cost between €750m and €1bn over the next four years.
Bank of Ireland last week reported €1.071bn profits for the year to the end of December, down from €1.2bn the previous year.
Although weaker sterling as a result of the Brexit vote has impacted on the bank, he said the wider impact had been less than expected.
“In the obvious places that you’d expect — retail and hospitality in the border counties and food and agriculture — we haven’t seen any material sign of credit distress,” he said
Boucher reiterated a commitment to the Bank of Ireland branch network, despite the costs.
“Cutting costs is just one side of the business,” he said. “The more challenging thing is growing your revenue. If you’re not physically on the ground, you’re not building a relationship with the community, you’re not identifying opportunities.”
Looking back on the banking crisis and the property crash, Boucher defended the role of so-called vulture funds, which have been criticised recently.
“No one wanted to invest in Ireland. They took the risk, the cash came in, so they were the providers of cash into the economy,” he said.
“They bought things that no one else wanted to buy and now they’re selling them on to other people. You had the high-risk people who were prepared to take a risk. I work with them, and not all of their plans work out. They sell on and then more cautious capital comes in,” he added.
Boucher has been at the helm of the bank since 2009 and said that he was thinking about what his future would be at the bank.
“We’re achieving a lot and as long as we’re doing that I remain committed.
“But I won’t be here forever and one of my jobs is to make sure that any transition is handled well, is handled smoothly,” he said. “I think you’ve let yourself down and you’ve let your organisation down if the company becomes too dependent on one individual. That’s the one thing I’ve learned in life: no one’s indispensable.”
My business tip is ... On the way home at night I always think about the day and I think ‘OK, what went well today?’ and if you had that day again, what would you have done slightly differently? If I wasn’t in banking ... I would have been a businessperson of some kind or other. I don’t really think my personality type or anything would suit different careers. In my spare time ... I like music, even though one of the reasons I kept my accent is I’m tone deaf but I listen to music quite a lot. I spend quite a lot of time watching sport and reading. The most interesting book I have read recently is ... The Undoing Project by Michael Lewis. It’s a fascinating book about how the human mind works on a subconscious bias.