Interview: Mike Ryan, Merrill Lynch International Bank

Published on 29 July, 2007. By John Reynolds

When you’re the chief executive of a bank with assets worth a cool €150 billion, evidently it pays to be cool, calm and collected.

Mike Ryan, chief executive of Merrill Lynch International Bank and Country Manager for Ireland is exactly that as we chat in his office overlooking the sprawling business park that has swallowed up Leopardstown village. And it pays to the tune of €386m to be exact – the figure for the bank’s profits last year.

Ryan’s own background in a way epitomises that of Merrill Lynch in Ireland. Most of the bank’s management team here left Ireland in the 1980s and have returned after carving out high-flying finance careers across the globe.

Ryan left after sitting his Leaving Certificate in 1980 to study law in the US and then returned in 1996 after stints as an associate with a New York law firm – where he worked on mergers and acquisitions, corporate finance and derivatives – and then as a vice president of Credit Suisse Financial Products.

“I’ve had many debates with taxi drivers about whether I’m Irish or American,” he jokes. Like many Irish CEOs whose careers took them to the States, he still has a slight mid-Atlantic accent and it complements a jovial and laid-back manner. Ryan’s legal training obviously stood him in good stead however, as he pauses briefly before giving what seems to be a measured response to each of my questions.

When he joined the company, there were only 50 people based here. By January 2003 Merrill Lynch’s workforce had quadrupled to 200 and in the last four and half years, it has quadrupled again to 800.

Last week the Taoiseach visited Merrill Lynch’s new €30m research, development and innovation (RDI) centre here, where Ryan hopes 40 new staff will emulate the success that innovation has brought in the IT sector. The centre’s bright and colourful open-plan design, complete with a project room, a couple of microkitchens and a collaboration area are in keeping with similar layouts in the offices of IT giants Intel, Google and Microsoft. The National University of Ireland Maynooth, which helped to pioneer the idea for the centre, also stressed the importance of fostering an innovation culture here.

“The staff that came back here from New York, London and Tokyo did a lot of sophisticated work and helped to generate enormous new opportunities and today Ireland is a hub for our centre of excellence in the areas of finance, technology, operations, equities, debts and a certain part of the global wealth management business.

“The RDI centre is a real added value proposition where we can mine opportunities more effectively, not only to benefit the company as a whole, but also our clients and partners. The RDI staff will have specialist knowledge in telecoms or technology and we hope there will be a cluster effect thanks to the likes of, Dell and Microsoft, which are all within a mile of here,” he adds.

At the moment two business development and technology teams are working on four projects; two which are compliance-based, one on margin finance and another on business process outsourcing. The project diagrams outside the project room look complicated, but that’s undoubtedly part of the secret of looking after billions of euros of other people’s money.

Isn’t Merrill Lynch really just here because of the low corporation tax rate, and isn’t that the only reason for it and all the other multinationals locating here? “It’s true that it’s a significant factor, but it’s by no means the only one. We have access to the EU market here and a responsive fiscal and regulatory environment, which allows growth and innovation. There’s the availability of talent as well so it’s a combination of these – together in the right mix, if you like – that you need for a company to be based here and to be successful,” Ryan argues.

“We’re continuing to invest here and we’re pleased at the level of talent here. The number people employed in financial services continues to rise, from about 2,500 in 1996 when I first came here to about 22,000 today. That’s a huge pool of talent. The more talent you have, the more productive and sustainable the growth will be for a company or an industry. That number hasn’t peaked yet, as there’s still a big demand for financial services staff out there,” he says.

Is the talent pool ever likely to run dry? “In the short term, there is now a shortage of skills in certain areas, but in the long term it won’t be an issue. The emigrants who brought their multinational experience back to Ireland proved that the country is very attractive for internationally mobile human capital that might not be Irish. We have to position Ireland to attract those people, and because we’re competing with the likes of London, Tokyo and New York, we have to focus on what makes us different and attractive to those people. There’s still a lot of Irish people working abroad – perhaps more than from some other EU countries if you were to compare it – as well,” he adds.

He’s also bullish generally about the business climate. “Costs have risen here but as long as the jobs people are doing are valuable then it’s not a problem.” Does he agree with other multinationals that are complaining about costs, of energy, for example? “The increased cost base will cause issues for certain industries. It needs to play itself out,” is his guarded response.

Whether playing itself out means the multinationals making more demands of government remains to be seen, but Ryan feels the financial services industry has no problems in this area. “If government policies continue to be targeted well, flexible, responsive and implemented quickly, then there is still enormous potential here in Ireland. We did this when we created the asset-covered securities market in 2003, which is now worth €75 billion and we’ve built on this even further since then,” he says.

What are his thoughts about market jitters in the US in relation to sub-prime mortgages? Are we about to enter a downturn? “I’m naturally optimistic, so although the economy is cyclical and we’ve had a good run with equities, for example, in the long run I think the global economy is in a good position.” Read into that what you will.

And with financial whizzkids in their mid twenties earning up to £65,000 a year plus the same again as a bonus in London at the moment, is Merrill Lynch paying big bonuses here in Dublin? “We have a performance-based culture and bonuses are a factor, particularly at mid and senior level. We have one system of compensation across all our global offices,” is all Ryan will reveal. The firm doesn’t believe in excesses like corporate or private jets for top executives, he adds.

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