Hundreds of Anglo jobs for axe in bid to slash costs
ANGLO Irish Bank is set to complete a massive cost-cutting plan within the next month -- leading to the loss of hundreds of jobs among its 1,700-strong workforce.
Average pay packages among the group's staff topped €106,000 last year, including share schemes and pension contributions, making them by far the best paid in the sector.
And, almost a week before the anniversary of the near-collapse of the entire Irish banking system, further details emerged yesterday of the extent of directors loans at the former high-flying property lender.
Labour Party finance spokesperson Joan Burton seized on reports that eight senior Anglo Irish Bank managers had €22m out on loan from the bank a year ago as evidence that senior figures had become "players in the property game in their own right".
The nationalised lender is transferring €28bn of loans to the National Asset Management Agency (NAMA), or 40pc of its total loan book. It is also believed to be preparing its €10bn US loan portfolio for sale.
A number of parties have made approaches for the US loans. But sources have described most of these as 'tyre-kickers' who are pitching well below the loans' actual value.
The Government must file a restructuring plan for Anglo with Brussels in November to satisfy state aid rules, after taxpayers pumped €3.8bn into the lender over the summer.
European competition commissioner Neelie Kroes has made it clear that restructuring plans must show how banks can become viable again -- or else outline plans for an orderly wind-down.
Industry sources believe the rate of writedowns Anglo faces on its NAMA-bound loans will be higher than the average 30pc hit Finance Minister Brian Lenihan estimated for the entire sector last week.
Analysts expect taxpayers will have to pump at least a further €3.5bn into Anglo to repair its reserves following the discount.
Meanwhile, loans to the eight senior bank managers reportedly ranged from €835,000 to €7.1m at September 30, 2008, the end of Anglo's financial year.
It is not clear which -- if any -- of these loans have turned sour. Anglo's only comment was to say that "every banking customer relationship is bound by customer confidentiality".
Anglo previously disclosed it had €186m out to directors and top management at the end of September, 2008, with former chairman Sean FitzPatrick accounting for €83.3m.
Worthless
The group also said in May that €31m of directors' loans -- including those that resigned during the year -- were 'impaired'. An impaired loan is where repayments have fallen well behind, or the value of the collateral has collapsed.
Many rank-and-file staff also have to repay large loans taken out to buy bank shares, during the boom, that are now worthless.
The Irish Independent recently reported that directors with impaired loans would not be considered for places on the nationalised lender's new management team.
Last week, the bank's new chief executive, Australian banker Mike Aynsley, named Peter Rossiter, an Irish-born executive with Citigroup, as his new chief risk officer.
Five other key management positions are expected to be filled in the coming months.
- Joe Brennan
