Commercial property lender Irish Nationwide Building Society, which is being bailed-out by the State, today reported a massive loss of almost €2.5bn for 2009 after providing €2.8bn for loan losses, having become a commercial property property lender in recent years. The society was established in 1873 by "far-sighted working-class men."
The results compare with a loss a loss of €243m in 2008, when it set aside €464m for bad loans and in a signal that the business is on a wind-down status, most of the news on its website is for 2009 and prior and it provides no online access to its latest accounts.
Under the management of Michael Fingleton over a 37 year period, the society was nominally owned by the depositors and after a reckless concentration on commercial property lending during the bubble, which accounted for more than 80 per cent of total lending, Fingleton was forced out with €27m pension pot and he had his board nod through a €1m bonus for failure. Almost half the commercial property lending was in respect of developments in the London area.
The State is due to take control of the firm and about
€2.7bn will have to be provided to bondholders from taxpayer funds and Fiingleton has refused the request of the Minister for Finance to repay the bonus.
The new chairman Danny Kitchen described the losses as "massive" in relation to the size of Irish Nationwide. He said the collapse in property markets was exacerbated by what he called the "flawed model" of how the society was run.
Customer deposits fell by €1.5bn last year to €5.3bn, mainly due to money being withdrawn from its subsidiary on the Isle of Man.
The Irish Industrial Benefit Building Society, forerunner of Irish Nationwide, began in October, 1873, when it was set up in a small room at 4 Harmony Row, off Fenian Street, Dublin 2, by "a small group of far-sighted working-class men."
Irish Industrial Benefit didn't trade from Harmony Row; that began on November 1 1873, from offices at 35 Denzille Street, Dublin 2. Later the original Society was on the move to 108 Lower Baggot Street. Then in July, 1927, the Society moved to 6 Upper Camden Street, eventually moving to the adjacent 7 and 8 Upper Camden Street. The society retained its headquarters on Camden Street for virtually 70 years.
In 1975 the name of the organisation changed from the Irish Industrial Benefit Building Society to Irish Nationwide Building Society.