'I was chief executive. I know what I've done wrong - but this report is seriously flawed'
'There was 2,200 people who did nothing wrong," insists Mark Duffy about his reasons for agreeing to talk about the explosive report into the collapse of HBOS published this week.
Those former Bank of Ireland (Scotland) staff, claims Duffy, had no right to reply.
"It's not so much unfair at me. I at least had a chance to bat back," says the former chief executive of BOSI, who ran the bank's operations here from 1999 to 2009.
He spoke exclusively to the Irish Independent yesterday.
The report by the Bank of England's Prudential Regulation Authority (PRA) reveals what appears to be a frightening expansion at BOSI during the last decade that, in common with other banks here, was lax, failed to mitigate for risk, and where at least some staff were ill-equipped to deal with the challenge set before them.
"If I look back, would I have done things differently? Of course I would have done things differently. I said that back in 2009," says Duffy. "I left with a commendation."
He reveals that BOSI had also been interested in buying National Irish Bank (it had already acquired Equity Bank in 1999 to enter the Irish market, and in 2001 bought State-owned ICC).
However, it had baulked at the deal because owner National Australia Bank had insisted that the operations in Northern Ireland must also be part of a transaction. Denmark's Danske Bank bought NIB in 2005, marking its debut in Ireland, a move that would also ultimately prove disastrous.
"I was chief executive. I know my role in this. I know what I've done wrong and I know what I could have done better," he says. "But this report is seriously flawed."
He says a significant issue is what he alleges to be a "conflict" of a British government enquiring probing a bank (Lloyds) that was controlled by the UK government during the financial crash.
"The report is a classic distraction away from a main issue: In 2010, a government-controlled bank took a decision to bomb their assets. What they're doing here is trying to pin it on their employees," Duffy alleges.
He also maintains that concerns raised about the Halifax retail arm in Ireland are "chaff".
And one of the biggest mistakes made by Lloyds after it acquired HBOS was to put a bullet in the head of Bank Of Scotland (Ireland), Duffy claims.
BOSI's loan book here had expanded at a rate of knots, from £8.9bn in 2004 to a staggering £30.7bn by 2008. But as the economy went into free-fall, it was faced with the same impairment crisis that other banks grappled with.
The report this week showed that losses in the HBOS international division, of which Ireland, Australia and the US were a part, ultimately rose to £15.5bn, of which £14.3bn, or 94pc, was incurred in Ireland.
The report shows that impairment losses at BOSI rose from £22m in 2007 to £2.9bn in 2009 and £4.3bn in 2010.
"It was self-inflicted," he argues of the losses that were ultimately crystalised at HBOS operations in Ireland. "Lloyds made an astonishing decision in 2010 to shut down all seven of its overseas subsidiaries. BOSI was one of them.
"There was bad lending in every bank. But this was about making a very bad decision, at the depths of the market. Lloyds had no experience of Ireland and made a decision to fire-sale everything," says Duffy.
"When you do that, you bring the market down and they brought it down on themselves," he argues.
"That was a politically-driven decision (the UK government owned a peak 43pc stake of Lloyds during the financial crisis, and still owns 11pc). Yes, there were issues in the (loan) book. But what you do at that stage is try to work it out. But Lloyds bailed out."
And Duffy says that as a result of ditching the Irish market and shouldering the losses, it gained "massive" tax credits.
"Impairments are not losses of capital to shareholders, and analysts say Lloyds will return between £20bn and £25bn to shareholders over the next three years."
Duffy argues that had the Irish, and other, assets been retained by Lloyds after being impaired, that a recovery in markets would ultimately have resulted in a significant chunk of those impairments being written back, lessening the overall losses that would have been incurred.
Regardless, the losses emanating from the Irish business would still have been very significant.
And with all the criticism heaped on the Irish operation, it's easy to wonder if Duffy had been the right person to lead BOSI. He points out that he spent 10 years at the helm.
"I took the bank from scratch to a large, profitable challenger. It's a question you'd need to put to them, but I felt I'd done a reasonable job. We'd brought competition. We were making money.
"There are not many chief executives who stay 17 years (including his stint at Equity Bank) in a public company."