independent

Thursday 17 April 2014

Tiarnan O'Mahoney targets new foreign exchange facility at SMEs

Former Anglo executives launch Irish arm of UK-based hedging firm Moneycorp

Two former Anglo Irish Bank executives – including the institution's one-time chief operating officer Tiarnan O'Mahoney – have just opened the Irish arm of a foreign exchange hedging business.

The Irish unit of UK-based Moneycorp is targeting Irish corporate and SMEs that typically have a foreign exchange demand of between €5m and €20m a year. Moneycorp claims it will offer the best rates and a better service than traditional banks.

Bryan McSharry, who was head of corporate treasury at Irish Bank Resolution Corporation (IBRC) and left the bank last year, is Mr O'Mahoney's partner in the Irish division of Moneycorp. Mr McSharry said that Moneycorp will initially employ 10 staff. It already has six and began trading almost two weeks ago.

He added that neither he nor Mr O'Mahoney have an equity stake in the Irish division, but that they are adequately incentivised to grow the business.

Within four years the company hopes to secure about 5pc of the €175bn or so in foreign exchange transactions that are carried out in Ireland every year, according to Mr McSharry.

He said that there has been strong interest in the service being offered by Moneycorp from Ireland's business community.

The margins now being charged by banks for currency hedging services are wider than they were a few years ago, Mr McSharry claimed.

Asked if their association with Anglo made it more difficult for them to promote their business, Mr McSharry and Mr O'Mahoney dismissed the suggestion.

"I left Anglo 10 years ago," said Mr O'Mahoney. "It doesn't come into it."

Mr O'Mahoney departed Anglo in 2005 after missing out on the chief executive job, which went to David Drumm.

ISTC

He subsequently established a firm called ISTC (International Securities and Trading Corporation).

It raised €165m from a number of high-profile investors including Anglo Irish Bank chairman Sean FitzPatrick, Sean Quinn and Johnny Ronan.

But the bond trading firm fell victim to the international financial crisis, with its investors losing their shirts. It had debts of over €435m, creditors amounting to €878m but assets of just €58m.

British investment bank Collins Stewart stepped in to acquire ISTC in 2008 for just €5m. Mr O'Mahoney later set up a firm called Collico Capital. He is also the former chairman of the Irish Pensions Board.

"We're looking forward," said Mr McSharry of their new venture. "We think we can grow employment." He said the business would be "highly attractive" to Irish firms.

Despite having left Anglo in 2005 and seen his ISTC business sold, Mr O'Mahoney briefed top civil servant Kevin Cardiff at the Department of Finance just four days before the bank guarantee was introduced in 2008.

The Department of Finance insisted that Mr O'Mahoney requested the meeting and that Mr Cardiff had offered "no indication" as to government policy.

Irish Independent

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