Allied Irish CEO Duffy to stay on at bank after turnaround

DUBLIN, June 19 Thu Jun 19, 2014 6:26am EDT

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DUBLIN, June 19 (Reuters) - State-owned Allied Irish Banks' (AIB) Chief Executive David Duffy, who led the bank's return to profit in the first quarter of the year, will stay on at the bank after signing a permanent contract, the bank said on Thursday.

Duffy, a former senior executive at South Africa's Standard Bank International and Dutch bank ING, joined AIB at the end of 2011 on a fixed contract of three years with an option to renew for up to a further three years.

Duffy has overseen a cost-cutting drive that has reduced its workforce by almost 20 percent, cut salaries by up to 15 percent and shut branches in a bid to turn it around much earlier than analysts had predicted since its bailout.

"I wish to advise that David Duffy has recently agreed to a permanent contract with the Bank given that his previous 3 year contract was due to end during December this year," AIB Chairman David Hodgkinson told the bank's annual shareholder meeting.

Bank executives in Ireland are subject to a government-imposed salary cap of 500,000 euros ($678,600) and Duffy took a pay cut as part of the bank-wide wage reductions, reducing his salary to 425,000 euros last year.

($1 = 0.7368 Euros) (Reporting by Padraic Halpin; Editing by James Macharia)

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