Mr. David Duffy:

Thank you very much, Chairman. As CEO of AIB since December 2011, I welcome this opportunity to outline to the Joint Committee of Inquiry into the Banking Crisis my own experience of joining a bank that was in a significantly challenged state and leading its return to stabilisation and recovery over a three-year period. I've worked in banking for almost 30 years, specialising in managing and restructuring banks through challenging times. Though I grew up and was educated in Ireland, I spent most of my career working abroad. From 1987 to 1997, I worked with Goldman Sachs International in various senior positions, including head of human resources Europe head of general services Europe and business manager for information technology. From 1998 to 2006, I held various positions at ING Group, including the position of head of global wholesale banking network. This role included the management of a team of CEOs covering all of the bank's regions globally.

Prior to that, I was president and chief executive officer of the ING franchises in the US and Latin America. From 2006 to 2011, I worked with Standard Bank PLC-Standard Bank International, including holding the position of CEO. In 2007, I took responsibility for the full international franchise. I relocated to Asia in the summer of 2010 and in October assumed the role of head of strategic projects. Leaving Standard Bank in 2011, I established Celtic Advisory International, providing capital raising and development advisory services to corporate and emerging companies.

I was asked to return to Ireland at the end of 2011 to become CEO at a troubled AIB that had been rescued by the Irish taxpayer following investments of €21 billion. Together with the then chairman, David Hodgkinson, who joined in late 2010, we set about a daunting task that involved a radical restructuring of the bank and its balance sheet, the implementation of a €350 million cost-cutting programme, an overhaul of the bank’s funding and pricing models, governance enhancements, and creating the ability to effectively deal with our challenged loan book.

Today AIB is a profitable organisation with key performance metrics in 2014 trending positive. In particular: our lending levels are increasing; our impaired loans and arrears levels are decreasing; the bank's capital and funding levels have stabilised and are improving; the bank’s organisational structure and risk framework have been restructured; the bank has received approval for its restructuring plan and passed the ECB-EBA comprehensive assessment; the bank has placed significant emphasis on meeting the expanded and enhanced regulatory environment across Europe. Having returned the bank to profit and stability, it is my expectation that AIB will be in a position to return capital to the Irish State over time, subject to economic conditions and the wishes of our majority shareholder.

In conclusion, as mentioned, I have covered the six topics here. I think the effectiveness of the bank's board governance is fairly well documented here, so I won't spend much time on that and we'll just deal with that in questions. Our bank credit risk strategies and risk management strategies are significantly updated here. I'd draw your attention to cash flow, credit lending, which is the most significant difference. There are many other complementary and important adjustments that have been made in the bank, but that area is one of particular emphasis, versus what has been a practice in the past.

With regard to remuneration arrangements and bank's risk assessment, I'd just draw your attention to the fact that we are under the bank's placing agreement and restricted in that matter, but I have documented our philosophy with regards to that for the purposes of discussion, although it has been in practice not applied due to the restrictions that we have.

On the clarity and effectiveness of the nexus of institutional roles and relationships, I think one area of emphasis that I will discuss is the fact that we are supervised in reality by the SSM, and so all decisions on capital funding, appointment of senior persons up to and including my replacement as a CEO, are at the behest of the European supervisors. I think those were the four that I particularly wanted to mention out of the six.

I would say that the liquidity and capital will be an extensive discussion, so I won't try and select components of that. And with regards to item 5, on the appropriateness and effectiveness of domestic policy responses, and in particular NAMA, I don't have much experience of the history prior to my arrival, but I'll endeavour to answer questions as best I can.

In summary, I wish to thank the committee of inquiry for considering my account as documented. I fully appreciate the difficulties you face in dealing with such a weight of information from so many witnesses. The banking and economic crisis in Ireland has indeed been staggering, the impact of which I could not fully understand until I returned to Ireland and witnessed the consequences first hand. I hope that my statement to you has assisted the committee in appreciating how, in spite of the depths to which it plunged, the bank has been stabilised and restructured and should go on to support the Irish economy and the Irish people, as it should rightly do. Chairman, that concludes my comments. Thank you.