Mr. Brian Goggin:

Thank you Chairman.

Good morning Chairman, members of the joint committee. I welcome this opportunity to appear before the inquiry and I will, of course, be as helpful as I can to assist you in your work. As you are aware, I have already submitted a witness statement, which addresses the lines of inquiry as requested by you. I will not repeat or summarise my witness statement here, but I will make some short introductory remarks.

I spent just short of 40 years at Bank of Ireland. I was group chief executive for the last of those 40 years until my retirement in 2009. My lifetime career covered both retail and wholesale banking, and I held senior management positions with the group in the US, the UK and in Ireland. During my time with Bank of Ireland, I always endeavoured to do my job to the very best of my ability in the interest of the bank and in the interests of all of its stakeholders.

As you will be aware, Bank of Ireland is a long established entity, which has played an important role in the Irish economy since it's opened its doors in 1783. Bank of Ireland has, down through the years, fostered a culture which is based on sound judgment and prudent decision-making. To put it in simple terms, Bank of Ireland has a more conservative approach to banking than many of its peers. This conservative philosophy continued, notwithstanding the significant growth that occurred during the period from 2000 onwards. Rolling five year strategies were adopted by senior management and the board in 2001, 2002, 2003 and 2004. Loan book growth in each of the markets in which we operated was an integral element of strategy throughout this period.

When I assumed the role of CEO in 2004, there were a number of factors impeding the bank's ability to achieve breakthrough in performance. As a group, Bank of Ireland had evolved as a collection of related but autonomous businesses. We found ourselves with multiple processes and systems and fragmented support infrastructure and an inability to avail of scale benefits. We were failing to adequately manage our costs, our relative financial performance was mediocre and our total shareholder return was in decline. As CEO, I was committed to addressing these factors.

In 2005-06, we undertook a new strategy development process. Over a nine month period, from September 2005, we undertook extensive work, using leading international expertise, to get a fuller understanding of the international trends driving the financial services environment and competitive scenarios. To identify implications and options for the bank, we undertook a robust process with significant involvement and challenge from the board. From this process we determined the following: (a) that the economic outlook for our key geographies would be broadly favourable with sustained GDP growth and low unemployment in our chosen markets; (b) that we would be able to support growth, including capital and liquidity through securitisation and wholesale funding; and (c) that we would build on our core capabilities in existing developed geographies, rather than new areas.

And finally that we would grow the loan book in a diversified way. he board approved this strategy in July 2006.

As things transpired, the growth of Bank of Ireland's loan book during this period generally reflected economic expansion and the overall growth of the market. There was growth in each of mortgage lending, consumer lending, SME lending, corporate lending, property and construction lending. Of course, it is now obvious that the absolute amount of property and construction lending was too much. The economic shocks in Ireland and the UK exposed this vulnerability with crystal clarity. While the consequence fallout from this was considerably better than our peers, this is of cold comfort.