Anglo Irish Bank -Taxpayer: ‘open your wallet’!

The publication of the latest 6-month results from recently nationalised Anglo Irish Bank, to 31 March 2009, have been described as ‘very disappointing’  by the Minister for Finance.   Chairman, Donal O’Connor, says they are a reflection of trading conditions that have been ‘very challenging’ and a funding environment that is ‘extremely challenging’.  All of this is now to be ‘very challenging’ for the Irish taxpayer who will be asked to immediately fork out €4 billion in additional capital out of ‘very disappointing’ Irish tax revenues in 2009 – not anticipated to surpass €34 billion.

Anglo has incurred a €4.1 billion loss including a specific impairment charges of €3.7 billion and collective charges of €400 million.  But there will be more, much more, perhaps as much as €3.5 billion more.  These calls on public resources have absolute precedence over all others, including special needs education, medical cards for older citizens because Anglo Irish Bank is of ‘systemic importance’  Citizens’ are not systemically important in this republic.  They are expendable pariahs’, apart from their capacity to sustain Ireland’s crony capitalists and the herd of politicians who feed of them.  The comments and supplications of economists employed by Irish banks’, brokers and representative bodies – reveal the insight of eunuchs with possibly a junior certificate grasp of economics and an overwhelming sense of their own self-importance.

It is particularly distressing to observe that a €31 million impairment charge relates to loans to directors of Anglo Irish Bank, including €8 million granted on ‘non-recourse’  terms but renewed on ‘full-recourse’ terms.  Directors’ loans total €175 million at 31 March 2009 before the impairment split between 10 directors, none of whom held office at 31 March 2209.  There are also loans of €7 million due from two senior managers.  Directors’ deposits at €20 million are €7 million less than on 31 March 2008.  The risk management processes at Anglo Irish Bank were as effective as splashing after shave on a skunk in order to eliminate foul odours.

The €175 million directors’ loan figure includes €106 million due from the former chairman, ‘Seánie’ FitzPatrick.  He owed €83.3 million on 30 September 2008 and €119.8 million on 31 March 2008.

Total loans outstanding increased slightly to €72.3 billion.  The proportion of this classified as ‘good’, ‘satisfactory’, ‘lower quality, but not impaired’ is €48.6 billion, compared to €68.44 billion on 30 September 2008.

Those that are ‘past due, but not impaired’ are €12.9 billion and, of great concern to taxpayers, the proportion of the loan book that is impaired is €10.7 billion.  The combined sum, €23.6 billion compares to €2.53 billion just six months earlier.

The are also some interesting changes in staff levels and remuneration following the disposal of Anglo’s Swiss and Austrian private banking businesses:

 

Anglo Irish Bank	6-Months to 31 March 2009	6-Months to 30 September 2008
Staff remuneration	€85,000,000	€114,000,000
Staff numbers	1,753	1,922
Average pay for half-year	€48,488	€59,313

 

When restated on an annual basis, the average pay at Anglo Irish Bank is €97,776, now funded by increased government borrowing.