Saturday 20 January 2018

David Drumm: He failed to sit the Leaving Cert but still made it to top in banking at Anglo

Mark Keenan

Mark Keenan

FOR a man who didn't sit his Leaving Certificate David Drumm enjoyed a remarkable rise through the ranks at Anglo, before he turned it into the monster which would cost a nation more than €30bn.

Born in the seaside suburb town of Skerries in north Co Dublin, he grew up a middle sibling in a large middle-class family. Educated by the Christian Brothers, he joined Deloitte and Touche from school to train as a chartered accountant.

In 1988 he moved to the venture capital wing of the International Fund for Ireland, where he helped fund new business start-ups and this was where he got his taste for finance.

After a move into auditing, which bored him, Mr Drumm applied for a manager's job with Anglo. He didn't get it but instead accepted a much lower-paid role as an assistant manager. The bosses liked his "can-do" approach and by 1995 he had been promoted to the manager's position he had wanted.

As a 'boutique' bank with a strategy of lending to small players – many of whom had been refused finance by the big banks – Anglo relied more than other finance houses on smart staff like Mr Drumm to make the vital call.

His big break came in 1997, when Anglo sent Mr Drumm to the US to set up operations there.

He moved his young family – his wife Lorraine and two daughters – to Boston. His first big deal was a $20m loan to Sean FitzPatrick's golfing buddy James Pappas to build the Harbor Point Market Place development in Dorchester.

Those who worked with Mr Drumm in Boston described him as a top-class networker, affable and easy to relate to, but also doggedly persistent and aggressive.

'The Drummer' gained a reputation for cutting up his competitors by offering larger amounts on longer terms.

He specifically targeted developers and spent lavish amounts taking them on expensive golf outings in the USA and over to Ireland.

David Drumm and his wife Lorraine in Cape Cod in the US
David Drumm and his wife Lorraine in Cape Cod in the US
The house of former Anglo Irish Bank chief executive David Drumm in Wellesley, Boston

He struck up a partnership with National Development, one of the region's largest commercial builders and Anglo was soon financing deals in Boston worth $300m.

Mr Drumm's reward for building Anglo's US operation from a suitcase to a €4.3bn gross asset business was his appointment to head of Irish lending in 2002, aged just 35.

In 2005, Mr Drumm was the surprise choice to succeed Mr FitzPatrick as chief executive of Anglo, beating off three other internal candidates – Tiarnan O'Mahoney, the chief operating officer, and the clear favourite; Tom Brown, then head of wealth management, and John Rowan, head of Anglo UK.

Under Mr Drumm the bank pursued developers more intensively, even to the point of finding projects for them to borrow towards.

With his no-nonsense effing and blinding approach, Drummer was instantly liked by developers.

Simon Kelly, son of developer Paddy Kelly, recalls his first meeting with Mr Drumm. "I knew immediately that he was different.

"He had a speed of mind and business logic that I would meet again and again from Anglo bankers.

"And he knew how to laugh – another characteristic of Anglo bankers."

Lending went into overdrive and the bank took increasingly bigger risks and larger punts. At first it seemed to be working a dream. Within three years of Mr Drumm taking the top job, Anglo's profits had grown by 70pc.

The boss of one of Ireland's largest financial advisers says: "We wondered whether Drumm and Anglo seemed to be in the grip of some sort of 'winner syndrome' – the win creates confidence which forces you to play even bigger next time. They just kept on going and going."

Then in 2008 Lehman Brothers collapsed and the rest is history. Mr Drumm beat a hasty retreat to Boston, the city that made him.

One of the first people to view the empty Malahide home he left behind said: "He took the curtains and blinds and 'even took the lightbulbs."

Irish Independent

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