Introduction
Anglo Irish Bank is a major financial institution whose viability is of systemic importance to Ireland. Anglo has a balance sheet of some €100bn with a substantial deposit base which the State is determined to safeguard.
The publication of the Annual Accounts today marks a watershed – an effective break between the old and the new Anglo. The Annual Accounts being published today for the year ending 30th September 2008 relate to a period before the State took control of Anglo Irish Bank and before the introduction of the Government’s Bank guarantee Scheme. These accounts will rightly be the subject of intense public scrutiny in light of the disclosure of inappropriate corporate governance practices in the Bank. These matters are now the subject of a number of ongoing investigations including by the Financial Regulator, and the Office of the Director of Corporate Enforcement.
As the new owner and sole shareholder in the Bank, on behalf of the State, I welcome the increased scrutiny of Anglo as an opportunity to bring openness to the Bank which will ultimately allow us to draw a line under past activities. It is an opportunity for Anglo to employ a fully transparent approach to addressing the inappropriate activities that took place at the Bank and provide comprehensive details to all stakeholders who deal with Anglo and who deal with Irish financial institutions generally. I welcome the Chairman’s approach in this regard. The commitment of the Chairman and the Board to openness and transparency underpins a new corporate ethos at Anglo Irish Bank and will determine its future conduct.
Inappropriate Practices at Anglo
Certain inappropriate practices and specific transactions involving Anglo have been the subject of much commentary in recent times. As noted above, many of these issues are the subject of investigation and it would not be appropriate for me to comment in detail on or prejudge the outcome of investigations by among others, the Financial Regulator and the Office of the Director of Corporate Enforcement.
However, as shareholder and Minister for Finance, I can unambiguously state that I will ensure where appropriate that any issues identified on foot of the relevant investigations are properly addressed. The conduct that has come to light at the bank is not acceptable. The disclosure of the inappropriate treatment of loans to Directors, specific transactions involving Irish Life and Permanent and lending to purchase a large amount of shares in the bank has severely damaged the reputation of Anglo Irish Bank and the Irish banking system as a whole, but I welcome the approach taken by the new Board of Anglo in disclosing, as far as possible, details on these matters while they remain under investigation. The publishing in the Annual Accounts of certain pre-existing arrangements for director’s pensions and gratuities and the Board’s commitment that such arrangements will not be advanced in the future, is also important in making clear the break with the past at the Bank.
I welcome the statement by the Chairman that the new Board is committed to ensuring that the governance processes in Anglo are of the highest standard.
The Future of Anglo Irish Bank
The Government made clear when bringing the relevant legislation through the Houses of the Oireachtas that Anglo Irish Bank would continue to be run as a going concern, at arms length from Government. To drive this process forward, the new Board is preparing a comprehensive business plan which will be required to demonstrate how the Board will oversee the continued commercial operation of the bank. I note that the Chairman in his statement has indicated the need for the Bank to evolve from its existing structure to a broader more diversified business bank and highlighted potential opportunities for the Bank in serving sole traders, SMEs and larger businesses. I will explore these issues further with the Board in the coming weeks.
The publication of these accounts concludes a regrettable chapter in the history of Anglo Irish Bank. With a new leadership structure in place, the bank can set about re-establishing itself as a reputable financial service provider. In its pledge of support for the Bank and in ensuring that all incidents of misconduct are pursued and dealt with appropriately and that such practices will never occur again, the Government is committed to making a new start for Anglo, in the best interests of the State and the taxpayer.
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Originally Posted by David Cochrane
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