Here's what happened the last time AIB went looking for a new chief executive. It appointed an international ex­ec­utive head-hunting firm, Spencer Stuart, to identify external candidates. Its internal selection committee, chaired by Dermot Gleeson, considered more than half-a-dozen names and eventually appointed Eugene Sheehy, the experienced AIB retail banker who was, at the time, looking after AIB's interests in the US. For their efforts, the recruitment consultants got paid up to a third of the new chief executive's €1m basic salary.

Five years later and, on the surface at least, it appears little has changed as the starting pistol sounds for yet another succession race. AIB has appointed the same London-based international executive search consultants, Spencer Stuart. A short list of half-a-dozen candidates will be considered by a committee led by AIB's newly appointed chairman, Dan O'Connor, the ex-GE Capital chief who started his senior banking career at the acquired Woodchester Bank. And, as in 2004, some of the same internal candidates are said to be jockeying for position.

Three candidates were favoured back then – Sheehy, Colm Doherty and Donal Forde. This time, Doherty, the AIB capital markets boss, is said to be still seeking the job. The plans of Robbie Henneberry, the new chief executive of AIB in the Republic, who has recently arrived after running First Trust in the North and AIB in Britain, are unknown.

In 2004, AIB was supposedly struggling to come to terms with a litany of scandals. But it was, in truth, business as usual.

Five years ago AIB, the country's largest bank, could still conduct its succession race as if the scandals swirling around it were nothing of its doing. An AIB-appointed consultant talked about the need to clean up the "culture" at the bank when the existence of Faldor offshore fund to benefit former executives was exposed.

A few year earlier, AIB had finally accounted for its unpaid Deposit Interest Retention Tax bill to the state, long after its then chief internal auditor had first warned it of the liability. In 2002, the bank hit the world headlines by losing $691m because of the rogue activities of trader John Rusnak, who was unfettered by weak controls directly inside its Allfirst Bank in the US.

And at the time of its last succession race, AIB was acknowledging a broad range of cases of ripping-off its customers – delicately referred by the bank as "overcharging issues". It went on to pay another €30m on a separate foreign exchange overcharging scandal that had gone on so long that it was an open secret in the bank. Just a few years before, in 2001, AIB had to hurriedly get the law changed because its Goodbody Stockbrokers had questionably traded through offshore centres in AIB shares. The testimony of another AIB head of internal audit to an Oireachtas committee in recent months hinted at a huge scale of the offshore trading operations.

Five years later and the taxpayer is having to pick up the pieces after AIB embarked on a unfettered strategy of expanding its loan book. The near meltdown of Irish banking has put many of the bank's earlier scandals in the shade.

"I still struggle to see how they are solvent," said a senior London banking analyst who did not wish to be named. "They are still the worst capitalised in the world and the poor old taxpayer will have to pay more," he said.

The bank analyst said that the imposition of a salary cap of €500,000 for the AIB top job may not necessarily hinder attracting external candidates because, in future years, a revised state guarantee would allow senior executives to tap the recovery in the bank through the payment of stock options.

"In this market," said Estelle Davis, manager of the banking division at Brightwater, a recruitment consultancy, "paying €500,000 will possibly not restrict the number of external candidates."

With the injection of €3.5bn of state cash, the taxpayer will formally own a quarter of AIB, and will control much more of the bank when more state cash is injected. Morally, the state already controls AIB because, without the taxpayer pledging its €440bn last September, AIB and other banks would have long collapsed.

Across the parties, politicians believe that the Minister for Finance, Brian Lenihan, even though he may not wish to acknowledge it, will exert huge influence over who wins the succession race at AIB.

Holding a veto "would normally be very dangerous thing to do," said Michael Moynihan, the Fianna Fáil chair of the Oireachtas Committee on Economic Regulatory Affairs, who says the committee will scrutinise closely all the candidates who want to run AIB.

Richard Bruton, Fine Gael deputy leader and finance spokesman, said an internal AIB candidate inevitably, will be scrutinised more than others. "The taxpayer is a big player and that has to be reflected in the way that the bank is run," said Bruton. But he warned that the AIB appointment was being made in a vacuum, with the local regulators failing to set out the attributes required of new directors of state-guaranteed Irish banks. "That is slow coming and the same people are still in situ in the regulatory structure," he said.

People with intimate knowledge of the workings of AIB also say that, though little acknowledged, the bank will be slimmed drastically in the coming years. Stripped of its bad property loans, AIB may look more like a retail and mortgage bank, with capital markets continuing to make money on the back of the normal retail operations. Some expert observers wryly say that paying €500,000 could be big enough remuneration for a new AIB boss who will inevitably be a corporate undertaker.

AIB has already crossed the strategic line by admitting that its large minority stake in M&T in the US and its Polish operations could be sold. If disposals are being considered, AIB could quietly also put up for sale its First Trust Bank in the North and AIB in Britain.

The need to clean up the bank, added to the severity of the slump, means AIB will be doing little in commercial lending here for several years.

Worldwide, bankers are recognising the fact that, while built with private-sector finance, banks are as much a part of the country's infrastructure as roads and airports and need to be treated accordingly.

Consequently, the appointment of a new boss at AIB is important not only to the bank's investors but to the country.

Despite keeping up appearances, AIB's appointment of a new chief executive is no ordinary succession search.