“[Anglo Irish] bank was owed almost €12bn by just 20 customers”

At Irish Election both Cian and P O’Neill are looking at the auditor’s redacted report on the shenanigans at the Anglo Irish Zombie Bank. According to the Minister for Finance, Brian Lenihan, “The publication of these accounts concludes a regrettable chapter in the history of Anglo Irish Bank.” [Concludes? – Ed] Not quite yet.. The detailed RTE report picks out a few choice details

The report said Anglo had about 15 customers who owed more than €500m each and that the size of these exposures increased the risk profile of the bank. The report warned that there were likely to be significant losses in store for individual property developers that would in turn result in significant losses for the bank. It said that the bank was owed almost €12bn by just 20 customers who borrowed for investment purposes and another €6.4bn by its top 20development customers.

Additionally

The report also clearly warned that the controversial €7bn back-to-back deposit arrangement involving Irish Life and Permanent had the effect of grossing up the bank’s balance sheet, boosting its customer deposits and interbank assets but that €6bn of this was unwound within three days of the financial year-end.

The report into the bank on behalf of the Government also found that the bank lost €5.4bn in deposits in one week alone during September.

As a result of these outflows of deposits the report says that the bank was forecasting that it was heading for a cash shortfall of at least €12bn by the middle of October.

And on former Chairman Sean Fitzpatrick

The report also reveals that at the end of September, loans to former chairman Sean FitzPatrick totalled €83.3m. A total of €179m was loaned to other directors.

The bank paid a total of €11.5m to directors in the year to the end of September, including a €3.75m payment to Tom Browne, who retired in November 2007, ‘in recognition of his contribution to the group’.

The report also shows that the bank paid rent totalling €31,500 to ‘close family members’ of Sean FitzPatrick for the use of a property in the UK which was used to accommodate the bank’s staff on a temporary basis.

Anglo Irish Bank Executive Chairman Donal O’Connor said the bank was likely to take a financial hit in the six months to the end of March linked to these loans, as a result of the deterioration in the bank’s share price.

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  • Scaramoosh

    “It said that the bank was owed almost €12bn by just 20 customers who borrowed for investment purposes and another €6.4bn by its top 20development customers.”

    These figures beg to simple questions;

    1/ How much interest are these persons paying, and what likelihood is there of them ever paying the money back?

    2/ What was the point in actually saving the bank?

    There are some very big names out there that owe this bank a fortune, and it will be interesting to see which Irish paper has the balls to name them. For those with an inquisitive mind, a search on google can throw up some interesting results….

  • It was Sammy Mc Nally what done it

    Presumably the state should be seizing/inheriting large quantities of properties as developers fail to repay

  • CS Parnell

    I wonder how many of these customers were either Fianna Fail politicians or close relatives of the same or significant donors to the party?

  • Wilde Rover

    “It said that the bank was owed almost €12bn by just 20 customers who borrowed for investment purposes and another €6.4bn by its top 20development customers.”

    So, if I am grasping this correctly, presumably a large chunk of that money has evaporated with the falling value of investments. This is money that is unlikely to be paid back at all.

    And if the taxpayer will be left picking up the tab how many of these investors will hang around?

    If I were in such a position I would be reaching for my passport and clearing those offshore accounts as soon as possible.

  • aquifer

    “I wonder how many of these customers were either Fianna Fail politicians or close relatives of the same or significant donors to the party? ”

    Great question CS. Especially when the FF government has now underwritten the bank.

    Or, in other words, FF have just written a huge IOU from the Irish taxpayer to the rest of the world.

    ROI are in a very strange place financially. If their banks are all zombies maybe they need to invite some foreign banks in to refinance the Economy before it sets solid.

  • Dave

    “And if the taxpayer will be left picking up the tab how many of these investors will hang around?” – WR

    Which, of course, highlights another lie that was proffered in justifying this sweetheart deal to the taxpayer: that nationalising this bank was required to create a stable investment climate for foreign investors.

    The reality of it doing the exact opposite was apparent from early October when the credit default swap rate on Irish government bonds began to rise as a result of the state guarantee scheme. The markets became very nervous that the state would bankrupt itself by making itself liable for the debts of private financial businesses.

    The external debt stands at 1.67 trillion and the government’s own fiscal deficit is heading for 20 billion this year, so the markets understand full well that the Irish government cannot afford to repay even a tiny fraction of this debt that is owned by private financial businesses in the state (just 1% of it is 16,700m). The markets know that when losses hit 50 billion or so and keep rising that the Irish government will accept that it can’t repay the rest, and the effect will be that the government screwed its own credit rating by making itself responsible for all that debt. The private businesses that ran up the debt won’t get credit either so that outcome isn’t averted by this lunatic action.

    So the result is that Ireland’s triple AAA credit rating is downgraded and the CDS rate is increased, increasing the cost of borrowing for the government and thereby increasing the deficit and national debt.

    Now, of course, others start comparing us to Iceland as a result of assuming state responsibility for these debts so, instead of creating stability, the whole country is imperilled and rendered unstable and no-one with any sense or money (mostly international investors) won’t invest here.

    But then again, we elected these pigf*ckers so we all get the government we deserve.

  • moggy

    Does any know why it’s called “anglo”?

  • “Stone Cold” Steve Austin

    Incest Loans Vested Out!

  • Mack
  • Mack

    Further, serious allegations here (read KerryNorth’s comments on page 1 & 2)-

    http://www.thepropertypin.com/viewtopic.php?f=46&t=19007

  • It was Sammy Mc Nally what done it

    Mack,

    If FF TD in the 10 (wonder how many super-rich to chose from ?) Cowen will probably not fall on his sword but try and tough it out for a few weeks.

    Interesting to see when mainstream Irish media carry this story – Irish Times breaking news should be carrying by now.