How Tribune Business reported the imminent departure of Eugene Sheehy last week

AIB, the country's largest bank, held approximately 60 board meetings in the last few months as internal pressure grew on chief executive Eugene Sheehy to step down from his post, after a period of major internal upheaval.

Institutional shareholders have told the Sunday Tribune an increase of 10% in the bank's dividend last year was a key moment that ultimately led to last week's departures. "The rot set in then and it was clear something was wrong," said an institutional investor source. The payment of the dividend deprived AIB of €270m of cash at a vulnerable time for the bank.

Last week the bank declined to comment on the precise reasons for the departures of Sheehy and chairman Dermot Gleeson. A replacement is likely to be drawn from the internal ranks at the bank.

"Given the goldfish bowl of Irish banking and the threat of state control, the ability to find a paragon of virtue with international experience is limited. There is a depth of talent at AIB and an internal candidate cannot be ruled out," said a senior source.

The resignation of Sheehy, Gleeson and chief financial officer John O'Donnell was described as a "big bang" and it surprised some people in the banking sector.

Meanwhile institutional investors are rowing in behind Irish Life & Permanent (IL&P) chair Gillian Bowler ahead of the group's agm on 15 May after a period of uncertainty surrounding her future.

Bowler appeared close to being forced out in February when it emerged IL&P had colluded in a circular transaction to make Anglo Irish Bank's deposit base look bigger than it actually was. Then chief executive Denis Casey resigned over the scandal.

But the big investment managers which control IL&P have since been reassured by the group's plans to restructure from a bank with an insurance company attached to a holding company with insurance, investment and banking divisions.

The institutions have also welcomed the go-slow approach to appointing a successor to Casey.