Ireland-based Ulster Bank has called in the support of McKinsey & Company to help its Board with the development of a new growth strategy.
Ulster Bank, one of the ‘big four’ Irish banks, recently appointment Gerry Mallon as the new CEO of its Ireland operation following the Royal Bank of Scotland’s, its parent company, decision to split the bank into separate Northern Ireland and Ireland operations. Mellon, who was formerly the CEO of Danske Bank, has been charged with further expanding Ulster Bank’s operation within Ireland.
As part of the development of a strategy to boost the bank’s growth, following a difficult period during the financial crisis – Ulster Bank needed $15 billion in capital from its parent to backfill its ailing finances – Mellon turned to his former employer McKinsey & Company, where he worked as an Engagement Manager from 1998 until 2002.
The role of the strategy consulting firm has not been fully disclosed (nor have the costs), however, the project itself is by Irish media reported to last eight to twelve weeks. The Financial Services Union stated that it will have input into the results of the work, in so far as it impacts its members. The consultants have been given the mandate to develop a strategy for the financial institution, and, given the changing banking landscape, translate the main pillars into a new, overarching target operating model. Preliminary reports in the country suggest that branches may be close or redesigned to bolster efficiency and meet changing customer demands, with the plan also forecasted to include significant investments in digital banking, one of the top trends in the financial services arena.
Commenting on the work, a spokesperson from Ulster Bank remarks, “A small team from McKinsey is supporting our business with a piece of work we have undertaken to identify and leverage opportunities in the Irish market. This work supports our ambition to become the number 1 bank for customer service, trust and advocacy.”
McKinsey is one of the main consulting firms with a foothold in the boardrooms of the Irish banking scene. During the crisis years the firm was, together with the Big Four and rival The Boston Consulting Group (BCG), one of the Government’s trusted consultants on banking matters – in total Ireland’s policy makers spent €153 million between 2008 and the 2014 on fees for external advisers.
Two years ago the Bank of England also tapped in the help of McKinsey, with the firm’s study showing that the institution’s culture (at the time) was marred by bureaucracy and internal politics. In similar strategic engagements in the banking sector, US-bank Comerica recently called in the help of BCG to deliver a strategic plan, while last year French giant BNP Paribas turned to BCG and Oliver Wyman to support an overhaul of its strategy.