Chief admits Irish division brought down the whole bank
A FORMER managing director of AIB’s Republic of Ireland division has agreed that his section brought the bank down.
Donal Forde said the suggestion by his former chairman Dermot Gleeson that Mr Forde’s division had brought the bank down was “substantially true”.
“The weight of the loans that ultimately caused problems did originate in our division,” he told the Banking Inquiry in response to questions from TD Eoghan Murphy.
Mr Gleeson had earlier told the Inquiry that the AIB divisions in the US, the UK and Poland came through the crisis “largely intact” but the Republic of Ireland Division became “embroiled in property lending which ran out of control”.
Mr Forde told the Inquiry that not foreseeing the scale of the collapse was a “serious misjudgement on my part.”
He believed the failure of the Bank was primarily because of the failure of the Credit Policy. The stress testing of repayment capacity was not sufficiently challenging and the load to value constraint inadequate.
Asked about his own salary and bonus of €1.7m in 2004, Mr Forde said he accepted looking back the salaries seemed silly “but they didn’t at the time”.