Fingleton in IL&P rescue talks before €1m bonus paid out
IL&P saw BNP Paribas as its own potential 'white knight'
Published 06/01/2010 | 05:00
Irish Nationwide was in rescue talks with Irish Life & Permanent (IL&P) weeks before the building society's boss Michael Fingleton received his controversial €1m bonus in November 2008, documents seen by the Irish Independent reveal.
This is likely to further stoke political and public outrage over the payment that Mr Fingleton has refused to return, despite promising to do so last spring. Nationwide has all but given up hope of getting the money back.
Minutes of a meeting on October 30 of that year between then IL&P chief executive Denis Casey and top brass at the Central Bank and Financial Regulator also show that the bancassurer was in talks with France's BNP Paribas as a potential white knight for itself.
It is also clear from Mr Casey's record, subsequently circulated to IL&P board members, that the group was hypersensitive to rumours that it would be forced to merge with troubled Anglo. It would also "create merry hell" if it was shoehorned into either of the country's two biggest banks, destroying "4,000 viable jobs".
Mr Casey told the meeting that IL&P was working on four scenarios: going it alone; finding a strategic partner; sourcing a funding partner; or acting as consolidator of smaller lenders. The document shows IL&P was already in exploratory tie-up talks with both EBS and Irish Nationwide at that stage.
The authorities seemed to be particularly interested in talks with Nationwide, which went on to post a full-year loss of €243m after writing down €464m of bad loans.
"I said we were working with MW (Michael Walsh, then society chairman) and things were progressing in a workmanlike way," Mr Casey recorded.
On the so-called "strategic partner agenda", Mr Casey said "the list of potential partners was shrinking (eg Fortis, Lloyds TSB) but that we were still talking to BNP". He added that BNP "had an interest in Ireland" but that its main focus was on bedding in a deal to take control of stricken Fortis in the Benelux countries, agreed earlier that month.
He also said IL&P was in talks with an unnamed potential US investor, who had indicated an interest in providing capital and funding.
A spokesman for IL&P said yesterday that the group "won't comment on leaked documents; however, given the circumstances of that time, it's hardly surprising that we were exploring a number of options, as other institutions would have been doing, also."
The document shows that Mr Casey later recorded he was "unnerved" when asked if IL&P would entertain a hostile bid, and wondered if Anglo "had postulated it as part of their strategy".
Anglo's former chairman Sean FitzPatrick made overtures to his IL&P counterpart, Gillian Bowler, about a potential tie-up between both institutions just before the guarantee scheme was struck.
Mr Casey had told the meeting that he did not consider that Anglo, with a "much higher-risk business", was a "good fit" for IL&P.