Anglo Irish Bank
Encyclopedia
Anglo Irish Bank was a bank
based in Ireland
with its headquarters in Dublin from 1964 to 2011. It went into wind-down mode after nationalisation in 2009.
In July 2011, Anglo Irish merged with the Irish Nationwide Building Society, with the new company being named the Irish Bank Resolution Corporation
. Michael Noonan
, the Minister for Finance
stated that the name change was important in order to remove "the negative international references associated with the appalling failings of both institutions and their previous managements."
Anglo Irish mainly dealt in business and commercial bank
ing, and had only a limited retail presence in the major Irish cities. It also had wealth management
and treasury divisions. Anglo Irish had operations in Austria, Switzerland, the United Kingdom, the United States, and the Isle of Man
.
The bank's heavy exposure to property lending, with most of its loan book being to builders and property developers, meant that it was badly affected by the downturn in the Irish property market in 2008. In December 2008, the Irish government announced plans to inject €1.5bn of capital for a 75% stake in the bank, effectively nationalising
it. The Dublin and London Stock Exchanges immediately suspended trading in Anglo Irish's shares, with the final closing share price of €0.22 representing a fall of over 98% from its peak.
On 16 January 2009, the Taoiseach
Brian Cowen
stated that is was "business as usual" at Anglo Irish Bank and that people should be reassured that the bank is solvent. Between June and September 2009, the Minister for Finance provided €4 billion in capital. In a statement on 30 March 2010, a day before Anglo Irish Bank reported its financial results, the Minister Of Finance, Brian Lenihan announced an injection of €8.3 billion into the bank, noting that a further €10 billion may be required at a later stage to cover future losses and ensure an adequate capital base.
Since the nationalization of Anglo Irish Bank a number of controversies have arisen over certain business practises & loans, including loans to directors, and loans to people associated with Brendan Murtagh, EMPG
and the QUINN group
.
On 31 March 2010, Anglo Irish Bank reported results for the 15 months to December 2009. Loss for the period were €12.7 billion, with an operating profit before impairment of €2.4 billion and an impairment charges of €15.1 billion driving the overall result. It is the largest loss in Irish corporate history. Total assets declined to €85.2 billion at the end of 2009 from €101.3 billion in September 2008.
The European Commission allowed the Irish Government on 10 August to temporarily grant €10 billion to Anglo Irish Bank - this included an additional €1.4 billion sought by Ireland recently to allow the nationalised bank meet its regulatory capital requirements in light of increased costs associated with transferring loans to the National Asset Management Agency
.
In order to protect the capital position of the Bank the Minister for Finance provided €4 billion in capital between June and September 2009. A liability management exercise was also undertaken in August 2009 and €1.8 billion of equity was realised on the buyback, at a significant discount, of subordinated debt instruments. In December 2009, the Minister committed to safeguard the Bank's regulatory capital position. As a result, the Minister issued of a promissory note for €8.3 billion on 31 March 2010, bringing the government's investment in Anglo Irish bank to €12.3 billion.
In his statement to the Irish Parliament on 30 March 2010, the Minister for Finance stated: "Finding a long-term solution for Anglo Irish Bank is by far the biggest challenge in resolving the banking crisis. The sheer size of the bank means there are no easy or low cost options. Winding-up the bank is not and was never a viable option."
In September 2010, the government announced that it would separate the bank into two entities, an "asset recovery bank" to manage existing loans, and a separate "funding bank" holding deposits.
With the substantial capital investment in the Bank by the government offsetting the provisions, the Core Tier 1 and total regulatory capital were €5 and €8 billion respectively at the end of 2009 versus risk weighted assets of €73 billion.
Anglo Irish Bank is the largest contributor of assets to Ireland's "bad bank", the National Asset Management Agency
. It expects to transfer loans with a nominal value of €35.6 billion to NAMA over 2010 which would see the risk-weighted-assets fall to €43 billion.
In Anglo Irish Bank's 2009 Annual Report, referring to the QUINN group
and related companies, it stated that the "High Court in Ireland appointed two joint provisional administrators to a significant corporate borrower of the Group. The Group is closely monitoring the situation and assessing the potential implications of this development which may have a negative impact on impairment charges in 2010."
Of the €36.5 billion of loans not being transferred to NAMA, Anglo Irish Bank has taken a provision of €4.9 billion. The article in the Times notes that Anglo Irish Bank has large exposures to entrepreneurs such as Seán Quinn of Quinn Group and Barry O’Callaghan, of EMPG. In both cases, the bank's security was limited and largely on the men's shares in businesses. The provision of €4.9 billion compares with impaired loans of €9.5 billion at the end of December 2009.
, CEO David Drumm, and board member Lars Bradshaw resigned in December 2008, following the revelation of a loan scandal. FitzPatrick and Bradshaw had taken out loans in order to purchase Anglo Irish shares. From 2000–2008, FitzPatrick transferred the loans to another bank prior to year-end audits, thereby causing "Loans to Directors" to be understated. In 2008, the loan to FitzPatrick and Bradshaw amounted to €87 million; the transfer resulted in the accounts showing only about €40 million outstanding to directors, instead of €150 million. The Central Bank of Ireland revealed that they became aware of problems surrounding loans from Anglo Irish Bank to FitzPatrick, following an inspection earlier in 2008. The regulator said, "While it does not appear that anything illegal took place in relation to these loans, the Central Bank of Ireland was of the view that the practices surrounding these loans were not appropriate. As a result, we continued to monitor and investigate this and as part of this process we advised Anglo-Irish Bank to ensure that these loans are reported in the annual accounts for 2008." The Financial Regulator resigned in January 2009 under pressure to do so.
In February 2009, Gardaí from the Bureau of Fraud Investigation raided the offices of Anglo Irish Bank.
In Anglo Irish Bank's 2009 Annual Report it lists loans to former directors totalling €155.8 million at the end of December 2009 versus €178.7 million at the end of September 2008. Whereas no provisions for impairment had been taken in September 2008, in the 2009 annual report, an impairment charge of €108.9m was reported, implying a potential loss of 70% of the value of the loans to former directors.
However, the total loans to directors, former directors and "connected persons" was reported to be significantly higher at €255m in the notes of the annual report.
, George Lee highlighted the potential exposure of the Irish taxpayer to the failure of Education Media and Publishing Group, the holding company of Houghton Mifflin Harcourt given loans by Anglo Irish Bank to investors in EMPG
. George Lee, TD for Dublin South, told journalists that EMPG, the parent company for US publisher Houghton Mifflin Harcourt, has failed with equity investors likely to be wiped out. The Irish taxpayer was exposed since Anglo Irish Bank had loans outstanding to the shareholders of EMPG.
George Lee commented:
Interviewed on Irish State broadcaster, RTÉ
, Barry O'Callaghan
, Chairman of EMPG and CEO of Houghton Mifflin Harcourt, confirmed that Irish investors as well as he himself were facing huge losses. He stated that "no-one has lost more than me".
According to the Irish Times, investors of Davy Stockbrokers
had $475m of equity in EMPG. The article did not identify how much or any of this investment was backed by Anglo Irish Bank loans. According to the Irish Independent, Barry O'Callaghan is a large personal customer of Anglo Irish Bank. The Irish Independent article noted that former Anglo Irish Bank Chairman, Sean FitzPatrick is one of the Davy clients that had invested in EMPG.
Based on an analysis of the Irish Independent's "2008 Rich List" and the Sunday Times "2009 Rich List", Barry O'Callaghan's personal debts in March 2008 were circa $400m.
On 15 January 2010, O'Callaghan admitted to having multimillion loans from Anglo Irish Bank and other international banks. Refusing to confirm the level of his indebtedness, O'Callaghan claimed to still be solvent and stated that he expects to honour all his obligations.
In contrast to the statement of George Lee that Irish taxpayers were exposed, an Anglo Irish Bank spokesperson was reported by the Irish Times to state that it did not have a "big exposure" to EMPG. However, the spokesperson did not comment on whether it has exposure to individuals that has exposure to EMPG.
has an additional €1.2 billion of loans. Of these circa €780m need to be re-financed this year.
Given the magnitude of the loans to Anglo Irish Bank the company was reported to be considering a €700 million financial rescue of the QUINN group
. The plan, would see €150m injected into Quinn Insurance and €550m would be used to pay off bondholders. Anglo Irish Bank would become majority shareholder in the Quinn Group.
The QUINN group
has taken action to counter the moves by the Financial Regulator including the mobilisation of its employees into street protests. The Group furthermore has rejected press speculation that the Group needs €700m of financing. Instead the Group estimates that a cash injection of between €100m and €150m is required. refusing to speculate on the need for a €550 million payment to bondholders, it noted that an re-financing, if it occurred, would not necessarily increase the overall debts of the Group.
On 12 April 2010, the Financial Regulator and QUINN group
were due in the High Court. The decision on a permanent appointment of administrators was postponed by one week, following a last minute submission of documents by the Quinn Group. The company pledged to work hard to seek a resolution to the uncertainty created by the appointment of provisional administrators to Quinn Insurance. On 15 April 2010, the Irish Times reported that Quinn Insurance decided not to fight the appointment of a permanent administrator.
According to the Irish Independent, Murtagh owns 40% of Howard Holdings, a Cork based property developer. Howard Holdings is estimated to owe nearly €500 million to Anglo Irish Bank.
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
based in Ireland
Republic of Ireland
Ireland , described as the Republic of Ireland , is a sovereign state in Europe occupying approximately five-sixths of the island of the same name. Its capital is Dublin. Ireland, which had a population of 4.58 million in 2011, is a constitutional republic governed as a parliamentary democracy,...
with its headquarters in Dublin from 1964 to 2011. It went into wind-down mode after nationalisation in 2009.
In July 2011, Anglo Irish merged with the Irish Nationwide Building Society, with the new company being named the Irish Bank Resolution Corporation
Irish Bank Resolution Corporation
The Irish Bank Resolution Corporation is the name given to the entity formed in 2011 by the court-mandated merger of the state-owned banking institutions Anglo Irish Bank and Irish Nationwide Building Society....
. Michael Noonan
Michael Noonan
Michael Noonan is an Irish Fine Gael politician and has been the Minister for Finance since March 2011. He has been a Teachta Dála for the Limerick East and later Limerick City constituencies since 1981....
, the Minister for Finance
Minister for Finance (Ireland)
The Minister for Finance is the title held by the Irish government minister responsible for all financial and monetary matters. The office-holder controls the Department of Finance and is considered one of the most important members of the Government of Ireland.The current Minister for Finance is...
stated that the name change was important in order to remove "the negative international references associated with the appalling failings of both institutions and their previous managements."
Anglo Irish mainly dealt in business and commercial bank
Commercial bank
After the implementation of the Glass–Steagall Act, the U.S. Congress required that banks engage only in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under U.S...
ing, and had only a limited retail presence in the major Irish cities. It also had wealth management
Wealth management
Wealth management is an investment advisory discipline that incorporates financial planning, investment portfolio management and a number of aggregated financial services...
and treasury divisions. Anglo Irish had operations in Austria, Switzerland, the United Kingdom, the United States, and the Isle of Man
Isle of Man
The Isle of Man , otherwise known simply as Mann , is a self-governing British Crown Dependency, located in the Irish Sea between the islands of Great Britain and Ireland, within the British Isles. The head of state is Queen Elizabeth II, who holds the title of Lord of Mann. The Lord of Mann is...
.
The bank's heavy exposure to property lending, with most of its loan book being to builders and property developers, meant that it was badly affected by the downturn in the Irish property market in 2008. In December 2008, the Irish government announced plans to inject €1.5bn of capital for a 75% stake in the bank, effectively nationalising
Nationalization
Nationalisation, also spelled nationalization, is the process of taking an industry or assets into government ownership by a national government or state. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being...
it. The Dublin and London Stock Exchanges immediately suspended trading in Anglo Irish's shares, with the final closing share price of €0.22 representing a fall of over 98% from its peak.
On 16 January 2009, the Taoiseach
Taoiseach
The Taoiseach is the head of government or prime minister of Ireland. The Taoiseach is appointed by the President upon the nomination of Dáil Éireann, the lower house of the Oireachtas , and must, in order to remain in office, retain the support of a majority in the Dáil.The current Taoiseach is...
Brian Cowen
Brian Cowen
Brian Cowen is a former Irish politician who served as Taoiseach of Ireland from 7 May 2008 to 9 March 2011. He was head of a coalition government led by Fianna Fáil which until 23 January 2011 had the support of the Green Party and independent TDs.Cowen was also leader of Fianna Fáil from 7 May...
stated that is was "business as usual" at Anglo Irish Bank and that people should be reassured that the bank is solvent. Between June and September 2009, the Minister for Finance provided €4 billion in capital. In a statement on 30 March 2010, a day before Anglo Irish Bank reported its financial results, the Minister Of Finance, Brian Lenihan announced an injection of €8.3 billion into the bank, noting that a further €10 billion may be required at a later stage to cover future losses and ensure an adequate capital base.
Since the nationalization of Anglo Irish Bank a number of controversies have arisen over certain business practises & loans, including loans to directors, and loans to people associated with Brendan Murtagh, EMPG
EMPG
Education Media and Publishing Group, more commonly known as EMPG, is a holding company registered in the Cayman Islands with no operating subsidiaries. It also has a minority interest in an affiliate that focuses on markets outside the USA called EMPGI...
and the QUINN group
Quinn Group
The QUINN group is a business group headquartered in Derrylin, County Fermanagh, Northern Ireland. The privately owned group has ventured into cement and concrete products, container glass, general insurance, radiators, plastics, hotels, and real estate...
.
On 31 March 2010, Anglo Irish Bank reported results for the 15 months to December 2009. Loss for the period were €12.7 billion, with an operating profit before impairment of €2.4 billion and an impairment charges of €15.1 billion driving the overall result. It is the largest loss in Irish corporate history. Total assets declined to €85.2 billion at the end of 2009 from €101.3 billion in September 2008.
The European Commission allowed the Irish Government on 10 August to temporarily grant €10 billion to Anglo Irish Bank - this included an additional €1.4 billion sought by Ireland recently to allow the nationalised bank meet its regulatory capital requirements in light of increased costs associated with transferring loans to the National Asset Management Agency
National Asset Management Agency
The National Asset Management Agency is a body created by the Government of Ireland in late 2009. It is in response to the Irish financial crisis and the deflation of the Irish property bubble....
.
Nationalisation
On 15 January 2009, the Government announced that it would take steps that would enable the Bank to be taken into State ownership. The Anglo Irish Bank Corporation Act, 2009 provided for the transfer of all the shares of the Bank to the Minister for Finance and was enacted under Irish law on 21 January 2009. On the same date, the Bank was re-registered as a private limited company.In order to protect the capital position of the Bank the Minister for Finance provided €4 billion in capital between June and September 2009. A liability management exercise was also undertaken in August 2009 and €1.8 billion of equity was realised on the buyback, at a significant discount, of subordinated debt instruments. In December 2009, the Minister committed to safeguard the Bank's regulatory capital position. As a result, the Minister issued of a promissory note for €8.3 billion on 31 March 2010, bringing the government's investment in Anglo Irish bank to €12.3 billion.
In his statement to the Irish Parliament on 30 March 2010, the Minister for Finance stated: "Finding a long-term solution for Anglo Irish Bank is by far the biggest challenge in resolving the banking crisis. The sheer size of the bank means there are no easy or low cost options. Winding-up the bank is not and was never a viable option."
In September 2010, the government announced that it would separate the bank into two entities, an "asset recovery bank" to manage existing loans, and a separate "funding bank" holding deposits.
Anglo & INBS Merger
A Transfer Order was made by the High Court in Dublin under the Credit Institutions (Stabilisation) Act 2010 transferring the assets and liabilities of Irish Nationwide Building Society (“INBS”) to Anglo Irish Bank Corporation Limited (“Anglo” or the “Bank”) on July 1st 2011. This achieves the legal merger of the INBS business into Anglo consistent with directions provided to both entities by the Minister for Finance, in consultation with the European Commission .Financial results
On 31 March 2010, Anglo Irish Bank reported results for the 15 months to December 2009. Loss for the period were €12.7 billion, with an operating profit before impairment of €2.4 billion and an impairment charges of €15.1 billion driving the overall result. Total assets declined to €85.2 billion at the end of 2009 from €101.3 billion in September 2008.With the substantial capital investment in the Bank by the government offsetting the provisions, the Core Tier 1 and total regulatory capital were €5 and €8 billion respectively at the end of 2009 versus risk weighted assets of €73 billion.
Anglo Irish Bank is the largest contributor of assets to Ireland's "bad bank", the National Asset Management Agency
National Asset Management Agency
The National Asset Management Agency is a body created by the Government of Ireland in late 2009. It is in response to the Irish financial crisis and the deflation of the Irish property bubble....
. It expects to transfer loans with a nominal value of €35.6 billion to NAMA over 2010 which would see the risk-weighted-assets fall to €43 billion.
In Anglo Irish Bank's 2009 Annual Report, referring to the QUINN group
Quinn Group
The QUINN group is a business group headquartered in Derrylin, County Fermanagh, Northern Ireland. The privately owned group has ventured into cement and concrete products, container glass, general insurance, radiators, plastics, hotels, and real estate...
and related companies, it stated that the "High Court in Ireland appointed two joint provisional administrators to a significant corporate borrower of the Group. The Group is closely monitoring the situation and assessing the potential implications of this development which may have a negative impact on impairment charges in 2010."
Controversy of business practises & loans
On 4 April 2010, the Times described the lending practises at Anglo Irish Bank and how these led to the nationalisation of the bank. The article quotes the new CEO, Mike Aynsley: "hubris played a very, very big part." In many deals, Anglo Irish Bank would lend to wealthy individuals to further their equity participation. According to the CEO of Ireland's the National Asset Management Agency (NAMA), loan-to-value on deals was as high as 100%. As a result the bank was totally exposed to any decline in value. In many cases, Anglo took personal guarantees as security. However, NAMA attaches no value to these personal guarantees.Of the €36.5 billion of loans not being transferred to NAMA, Anglo Irish Bank has taken a provision of €4.9 billion. The article in the Times notes that Anglo Irish Bank has large exposures to entrepreneurs such as Seán Quinn of Quinn Group and Barry O’Callaghan, of EMPG. In both cases, the bank's security was limited and largely on the men's shares in businesses. The provision of €4.9 billion compares with impaired loans of €9.5 billion at the end of December 2009.
Loans to directors scandal
Chairman Sean FitzPatrickSean FitzPatrick
Seán FitzPatrick was chairman of Anglo Irish Bank until he resigned in December 2008 amid mounting revelations over hidden loans...
, CEO David Drumm, and board member Lars Bradshaw resigned in December 2008, following the revelation of a loan scandal. FitzPatrick and Bradshaw had taken out loans in order to purchase Anglo Irish shares. From 2000–2008, FitzPatrick transferred the loans to another bank prior to year-end audits, thereby causing "Loans to Directors" to be understated. In 2008, the loan to FitzPatrick and Bradshaw amounted to €87 million; the transfer resulted in the accounts showing only about €40 million outstanding to directors, instead of €150 million. The Central Bank of Ireland revealed that they became aware of problems surrounding loans from Anglo Irish Bank to FitzPatrick, following an inspection earlier in 2008. The regulator said, "While it does not appear that anything illegal took place in relation to these loans, the Central Bank of Ireland was of the view that the practices surrounding these loans were not appropriate. As a result, we continued to monitor and investigate this and as part of this process we advised Anglo-Irish Bank to ensure that these loans are reported in the annual accounts for 2008." The Financial Regulator resigned in January 2009 under pressure to do so.
In February 2009, Gardaí from the Bureau of Fraud Investigation raided the offices of Anglo Irish Bank.
In Anglo Irish Bank's 2009 Annual Report it lists loans to former directors totalling €155.8 million at the end of December 2009 versus €178.7 million at the end of September 2008. Whereas no provisions for impairment had been taken in September 2008, in the 2009 annual report, an impairment charge of €108.9m was reported, implying a potential loss of 70% of the value of the loans to former directors.
However, the total loans to directors, former directors and "connected persons" was reported to be significantly higher at €255m in the notes of the annual report.
Mainland Ventures
As of November 2009, twenty-one major, Irish investors are suing Anglo and its Delaware subsidiary, Mainland Ventures Corporation, for $23 million due to "fraudulent and/or reckless concealment" perpetrated in regards to a hotel investment fund. The outcome is pending.EMPG loans
On 13 January 2009, opposition party TDTeachta Dála
A Teachta Dála , usually abbreviated as TD in English, is a member of Dáil Éireann, the lower house of the Oireachtas . It is the equivalent of terms such as "Member of Parliament" or "deputy" used in other states. The official translation of the term is "Deputy to the Dáil", though a more literal...
, George Lee highlighted the potential exposure of the Irish taxpayer to the failure of Education Media and Publishing Group, the holding company of Houghton Mifflin Harcourt given loans by Anglo Irish Bank to investors in EMPG
EMPG
Education Media and Publishing Group, more commonly known as EMPG, is a holding company registered in the Cayman Islands with no operating subsidiaries. It also has a minority interest in an affiliate that focuses on markets outside the USA called EMPGI...
. George Lee, TD for Dublin South, told journalists that EMPG, the parent company for US publisher Houghton Mifflin Harcourt, has failed with equity investors likely to be wiped out. The Irish taxpayer was exposed since Anglo Irish Bank had loans outstanding to the shareholders of EMPG.
George Lee commented:
Interviewed on Irish State broadcaster, RTÉ
Raidió Teilifís Éireann
Raidió Teilifís Éireann is a semi-state company and the public service broadcaster of Ireland. It both produces programmes and broadcasts them on television, radio and the Internet. The radio service began on January 1, 1926, while regular television broadcasts began on December 31, 1961, making...
, Barry O'Callaghan
Barry O'Callaghan
Barry O'Callaghan is an Irish businessman, Chairman and CEO of Houghton Mifflin Harcourt , and the Chairman of Education Media and Publishing Group , the Cayman Island holding company for Houghton Mifflin Harcourt....
, Chairman of EMPG and CEO of Houghton Mifflin Harcourt, confirmed that Irish investors as well as he himself were facing huge losses. He stated that "no-one has lost more than me".
According to the Irish Times, investors of Davy Stockbrokers
Davy Stockbrokers
Davy is Ireland's largest stockbroker, wealth manager and financial advisor and has offices in Dublin, Belfast, Cork, Galway and London. Davy offer a range of services to private clients, small businesses, corporations and institutional investors....
had $475m of equity in EMPG. The article did not identify how much or any of this investment was backed by Anglo Irish Bank loans. According to the Irish Independent, Barry O'Callaghan is a large personal customer of Anglo Irish Bank. The Irish Independent article noted that former Anglo Irish Bank Chairman, Sean FitzPatrick is one of the Davy clients that had invested in EMPG.
Based on an analysis of the Irish Independent's "2008 Rich List" and the Sunday Times "2009 Rich List", Barry O'Callaghan's personal debts in March 2008 were circa $400m.
On 15 January 2010, O'Callaghan admitted to having multimillion loans from Anglo Irish Bank and other international banks. Refusing to confirm the level of his indebtedness, O'Callaghan claimed to still be solvent and stated that he expects to honour all his obligations.
In contrast to the statement of George Lee that Irish taxpayers were exposed, an Anglo Irish Bank spokesperson was reported by the Irish Times to state that it did not have a "big exposure" to EMPG. However, the spokesperson did not comment on whether it has exposure to individuals that has exposure to EMPG.
Loans to Sean Quinn & the Quinn Group
On 30 March 2010, following an application by Ireland's Financial Regulator, the High Court appointed joint provisional administrators to Quinn Insurance Limited. According to the Irish Independent, eight subsidiaries of Quinn Insurance provided guarantees of €1.2bn to cover Quinn Group's debts, prompting the regulator to seek the appointment of provisional administrators in the High Court. In total the Quinn family is estimated to have €2.8 billion of loans from Anglo Irish Bank and the QUINN groupQuinn Group
The QUINN group is a business group headquartered in Derrylin, County Fermanagh, Northern Ireland. The privately owned group has ventured into cement and concrete products, container glass, general insurance, radiators, plastics, hotels, and real estate...
has an additional €1.2 billion of loans. Of these circa €780m need to be re-financed this year.
Given the magnitude of the loans to Anglo Irish Bank the company was reported to be considering a €700 million financial rescue of the QUINN group
Quinn Group
The QUINN group is a business group headquartered in Derrylin, County Fermanagh, Northern Ireland. The privately owned group has ventured into cement and concrete products, container glass, general insurance, radiators, plastics, hotels, and real estate...
. The plan, would see €150m injected into Quinn Insurance and €550m would be used to pay off bondholders. Anglo Irish Bank would become majority shareholder in the Quinn Group.
The QUINN group
Quinn Group
The QUINN group is a business group headquartered in Derrylin, County Fermanagh, Northern Ireland. The privately owned group has ventured into cement and concrete products, container glass, general insurance, radiators, plastics, hotels, and real estate...
has taken action to counter the moves by the Financial Regulator including the mobilisation of its employees into street protests. The Group furthermore has rejected press speculation that the Group needs €700m of financing. Instead the Group estimates that a cash injection of between €100m and €150m is required. refusing to speculate on the need for a €550 million payment to bondholders, it noted that an re-financing, if it occurred, would not necessarily increase the overall debts of the Group.
On 12 April 2010, the Financial Regulator and QUINN group
Quinn Group
The QUINN group is a business group headquartered in Derrylin, County Fermanagh, Northern Ireland. The privately owned group has ventured into cement and concrete products, container glass, general insurance, radiators, plastics, hotels, and real estate...
were due in the High Court. The decision on a permanent appointment of administrators was postponed by one week, following a last minute submission of documents by the Quinn Group. The company pledged to work hard to seek a resolution to the uncertainty created by the appointment of provisional administrators to Quinn Insurance. On 15 April 2010, the Irish Times reported that Quinn Insurance decided not to fight the appointment of a permanent administrator.
Loans to Smart Telecom directors and Brendan Murtagh
On 15 April 2010, the Irish Independent reported that Brendan Murtagh, founder of Kingspan and former chairman of Smart Telecom, had lost a court bid to retain funds worth up to €1.2m towards "living expenses" over a case in which investors are pursuing a €28m debt. Murtagh was reported to once have an estimated net worth of €271m but now has liabilities of €353 million including "colossal" sums owed to Anglo Irish Bank. This move against a former director of Smart Telecom, came after Anglo Irish Bank pursued the former CEO, Oisin Fanning for debts of €8.6 million, in January 2009. At the time, Fanning claimed that he was pressurised into taking out the loan to buy shares in Smart Telecom and that Anglo Irish Bank was unconcerned that he had no means to repay it.According to the Irish Independent, Murtagh owns 40% of Howard Holdings, a Cork based property developer. Howard Holdings is estimated to owe nearly €500 million to Anglo Irish Bank.
History
- 1964 – Anglo Irish Bank was established in Dublin.
- 1971 – Anglo Irish listed on the stock exchange.
- 1988 – Anglo Irish acquired Irish Bank of Commerce.
- 1995 – Anglo Irish acquired Royal Trust Bank (Austria), a bank with a 100 year history, from Royal Bank of CanadaRoyal Bank of CanadaThe Royal Bank of Canada or RBC Financial Group is the largest financial institution in Canada, as measured by deposits, revenues, and market capitalization. The bank serves seventeen million clients and has 80,100 employees worldwide. The company corporate headquarters are located in Toronto,...
and renamed it Anglo Irish Bank (Austria). Anglo Irish also acquired a loan portfolio from Allied DunbarAllied DunbarAllied Dunbar was a large British assurance group. In its early years as Hambro Life Assurance it was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index...
. - 1996 – Anglo Irish acquired Ansbacher Bankers, which was established in Dublin in 1950.
- 1998 – Anglo Irish acquired Crédit LyonnaisCrédit LyonnaisCrédit Lyonnais is a historic French bank. In the early 1990s it was the largest French bank, majority state-owned at that point. Crédit Lyonnais was the subject of poor management during that period which almost led to its bankruptcy in 1993...
(Austria) and combined it with its existing Austrian operations. - 1999 – Anglo Irish acquired Smurfit Paribas Bank, a joint-venture that Banque Paribas had helped establish in Dublin in 1983. Anglo – Irish also bought a loan portfolio from Bayerische Hypo- und Vereinsbank.
- 2001 – Anglo Irish acquired Banque Marcuard Cook & Cie. in GenevaGenevaGeneva In the national languages of Switzerland the city is known as Genf , Ginevra and Genevra is the second-most-populous city in Switzerland and is the most populous city of Romandie, the French-speaking part of Switzerland...
, Switzerland, and renamed it Anglo Irish Bank (Suisse). - 2005 – Chief Executive Seán FitzPatrick stepped down to assume the role of chairman. David Drumm replaced him as CEO.
- 2007 – In January, it was reported that Seán QuinnSeán QuinnSeán Quinn is an Irish businessman and conglomerateur, now bankrupt. In 2008 he was the richest person in Ireland, but he now has debts...
bought a 5% stake of Anglo Irish Bank for $750 million. In July 2008 Quinn converted investmentsContract for differenceIn finance, a contract for difference is a contract between two parties, typically described as "buyer" and "seller", stipulating that the buyer will pay to the seller the difference between the current value of an asset and its value at contract time...
in the bank to ordinary shares, increasing his family's stake to 15%. - 2007- Later in the same January, consultants Oliver WymanOliver WymanOliver Wyman is an international management consulting firm. Founded in 1984, the firm adopted its current form in May 2007, when Mercer Oliver Wyman joined with Mercer Management Consulting and Mercer Delta to become one firm named Oliver Wyman. Oliver Wyman is headquartered in New York City with...
named Anglo Irish Bank as the best bank in the world in a piece of research published to coincide with the World Economic ForumWorld Economic ForumThe World Economic Forum is a Swiss non-profit foundation, based in Cologny, Geneva, best known for its annual meeting in Davos, a mountain resort in Graubünden, in the eastern Alps region of Switzerland....
in DavosDavosDavos is a municipality in the district of Prättigau/Davos in the canton of Graubünden, Switzerland. It has a permanent population of 11,248 . Davos is located on the Landwasser River, in the Swiss Alps, between the Plessur and Albula Range...
, SwitzerlandSwitzerlandSwitzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition.... - 2008 – In December, both FitzPatrick, the Chairman, and Drumm, the CEO, resigned (see above).
- 2009 - Merrill LynchMerrill LynchMerrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...
, after receiving a fee of over $11 million, said that the bank was "financially sound", 11 days before nationalisation. - 2009 – The Irish Government nationalised Anglo Irish Bank at which point the Irish Stock ExchangeIrish Stock Exchange-History:The Irish Stock Exchange is Ireland's only stock exchange and has been in existence since 1793. It is an Irish private company limited by guarantee. It was first recognised by legislation in 1799 when the Irish Parliament passed the Stock Exchange Act...
and the London Stock ExchangeLondon Stock ExchangeThe London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
delisted the bank. On 19 January the Board of Directors resigned to allow the Government to appoint a new board. - 2010 – Alan DukesAlan DukesAlan Dukes is a former Irish politician who served as leader of the Fine Gael political party and Teachta Dála for Kildare and Kildare South. He holds the distinction of being one of only five TDs to be appointed Minister on their first day in the Dáil. He lost his seat in the 2002 general election...
appointed chairman - 18 March 2010 – Former chairman Sean FitzPatrickSean FitzPatrickSeán FitzPatrick was chairman of Anglo Irish Bank until he resigned in December 2008 amid mounting revelations over hidden loans...
is arrested for fraud. - 31 March 2010 - At €12.7 billion, Anglo posts the largest loss in Irish corporate history.
- 2 June 2010 - Irish Minister of Finance, Brian Lenihan, announced a €2bn cash injection for Anglo Irish Bank.
- 8 September 2010 - Lenihan announced the separation into two entities.
- 30 September 2010 - the Irish Government announces a total estimate of the eventual cost of the Anglo Irish bailout as at least €29.3 billion, while also announcing that two other banks, AIB and Irish Nationwide, will require additional funding
- 31 March 2011 - For the year 2010 Anglo Irish Bank announced a €17.7 billion loss, breaking its own record for the highest corporate loss in Irish history .