Irish Nationwide Building Society (INBS) chief executive, Michael Fingleton,
told the Government 10 days before issue of State bank guarantee, that the
society was 'well managed' and 'very profitable.'
The Dáil Public Accounts Committee (PAC) on Tuesday published additional
copies of Department of Finance paperwork from the period leading up to the
issue of the State banking guarantee at the end of September 2008.
Fingleton sent a letter to David Doyle, secretary general, of the Department
of Finance on Sept 19, 2008 claiming that despite its liquidity problems, it was
a 'very profitable and viable financial institution.'
On Sept 05, 2008, Moody's, the international ratings agency, had downgraded
INBS debt because of the exposure to commercial property and development,
accounting for 80% of the loan book.
The State has committed capital of €5.4bn to save
INBS from collapse.
On Sept 18, 2008, Basil Geoghegan of
Goldman Sachs, the US investment bank, e-mailed the Department of Finance
regarding an assignment to review INBS's books and he referred to the
with the code 'Harmony.'
Geoghegan asked: "has there been interaction with the Irish auditing firms to
discuss what are they going to do at year end across the sector? They have a
huge responsibility to discharge this year."
They also had a huge responsibility to discharge prior to the crisis.
Last April, INBS
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
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, Fingleton was forced out with €27m pension pot and he had his board nod through
a €1m bonus for failure as well as over €400,000 in lieu of holidays
not taken. Almost half the commercial property lending was in
respect of developments in the London area.
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 to 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.
Finfacts report: Lenihan says failure of Anglo Irish Bank would "bring down" the country
- - see 2 key videos here on the State bank guarantee.
Correspondence, dated 13th October, from Kevin Cardiff, Secretary
General, Department of Finance:
Documents previously issued by the PAC.