Saturday 3 December 2016

ECB-advice firm had pitched for Irish bank work

Lazard now consultants on restructuring process

Laura Noonan , Banking Correspondent

Published 14/09/2011 | 05:00

THE consultants engaged by the European Central Bank to advise on Irish banks' restructuring efforts had previously pitched to work on the asset-sale plans of at least one of the banks being scrutinised.

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Sources last night confirmed specialist finance house Lazard had been retained by the ECB to advise on the deleveraging mission that will see Irish banks sell off more than €70bn of assets.

It is understood Lazard unsuccessfully bid to advise at least one Irish bank on its deleveraging efforts, before applying for the ECB work.

Lazard has also advised on two "small" asset sales for the Irish banks in recent months, the Irish Independent has learnt.

A spokesman for Lazard declined to comment on whether his firm had disclosed its previous Irish bids to the ECB, and whether any conflict of interest existed. The ECB also declined to comment.

Sanctions

It is understood, however, that the ECB was aware of Lazard's previous efforts to win work in the Irish deleveraging projects, and that the ECB sanctioned the two recent projects.

Under the terms of its engagement with the ECB, Lazard is believed to be prohibited from offering "strategic advice" to Irish banks.

Lazard is allowed to advise on individual asset sales -- provided the staff working on the ECB contract do not also work on those asset sales.

Sources last night pointed out that the world of specialist finance was relatively small, and that virtually all firms had either pitched for work on the Irish banking crisis or actually done work here.

Several firms, including BlackRock, Barclays and Boston Consulting, were reportedly excluded from the ECB tender because of their recent work on the stress tests.

At a press conference in August, ECB chief Jean-Claude Trichet said appointing the advisers was the "right way to go" given the scale of the bank's exposure to Frankfurt.

There was "no additional interpretation", Mr Trichet said, dismissing suggestions the ECB was revisiting its approach to the Irish banking crisis.

The ECB launched the tender for Irish restructuring advisers in April, when our bailed-out banks were being supported by more than €150bn of liquidity from Frankfurt and the Central Bank of Ireland.

Along with the other members of the so-called "troika", the ECB is given regular reports on the deleveraging project under the terms of the 'memorandum of understanding'.

The most material disposal to have arisen so far is the sale of Anglo's $9.5bn (€6.9bn) US loan book, which is almost completed. The other banks have also sold some foreign assets.

Irish Independent

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