Bank to write off €109m as ex-directors default on loans
ANGLO Irish Bank is prepared to write off €109m in loans after former directors, including Sean FitzPatrick, failed to repay the bank.
Finance Minister Brian Lenihan recently said the bank would pursue former directors with loans to the "ends of the earth".
But the bank is preparing to write off many of the loans on the basis that directors cannot or will not repay the money.
Anglo sources said yesterday that most former directors were co-operating fully on the issue, but many were telling the bank they did not have the money, or needed more time to raise it.
At the end of 2009 the bank had €155.2m in loans outstanding to directors and former directors, but after taking an "impairment" on these loans, there was €46.3m outstanding.
The vast majority of loans were advanced in a "personal capacity" to the directors and former directors, the bank's annual report shows.
In an unprecedented move, the bank has disclosed individual loans and whether or not they are in arrears. It also disclosed in broad terms what the loans were used for.
The largest director's loans were held at the end of 2009 by former chairman Sean FitzPatrick, at €88.7m. According to the accounts, the bank had to make a provision of €67.9m because the loans are not expected to be repaid. One of these provisions came to €40.2m, although the report simply said this loan was to fund "a number of investments".
The second largest number of loans outstanding were to Lar Bradshaw, who made a number of investments with Mr FitzPatrick. According to the report Mr Bradshaw had €28.5m of loans outstanding with the bank, with provisions of €21.9m covering most of these loans. The provision is taken based on the likelihood repayment will not be made.
Gary McGann had large sums in loans from the bank, amounting to €10.6m at the end of 2009. The report does not include any provision for McGann's loans not being repaid.
Willie McAteer, a former director who was recently arrested and questioned, had €8.5m of loans outstanding. The bank took a major provision on McAteer's loan of €7.6m.
The former chief executive David Drumm was also advanced large loans. According to the report he had €8.3m of loans at the end of 2009, with the bank forced to take provisions of €6.7m on these. Mr Drumm is in dispute with the bank over loans and bonuses he claims are owed to him.
The annual report also itemises the levels of interest outstanding on loans. Mr FitzPatrick has the largest problem in this area, according to the report. One loan of €54.6m had interest of €498,799 due. Despite taking a large provision for the Bradshaw loans, the interest outstanding on these loans was negligible.