Thursday 22 March 2018

Broken Anglo spends €100m on external advisers

Donal O'Donovan and Emmet Oliver

ANGLO Irish Bank has spent €100m on outside advisers in relation to the bank rescue, 90pc of it since it was nationalised last year, documents discovered by the Dail Public Accounts Committee (PAC) revealed last night.

The figure emerged in a Department of Finance response to a PAC query seeking information on the cost of external advice in relation to the government guarantee, bank recapitalisation and NAMA.

AIB, Bank of Ireland, Anglo Irish Bank, Irish Life & Permanent and EBS each provided details of spending to the committee, which is chaired by TD Bernard Allen.

Spending by Anglo was nearly four times higher than the €26m paid out by next highest spender, Bank of Ireland.

Former Justice Minister Michael McDowell and Peter Sutherland's Goldman Sachs were among the beneficiaries in documents that showed that bailed-out banks were spending tens of millions on outside advisers, despite needing billions in taxpayers' money just to stay afloat.

The documents lodged with the PAC revealed that many of the same property, finance and legal firms that made millions from the boom are now raking in millions more money through advising the banks.

The documents even detail spending on property consultants, public relations advisers and recruitment firms between 2009 and 2010.

Figures for a number of banks include big fees to the Department of Finance among their costs.

Anglo Irish Bank and Irish Nationwide emerged as the notably big spenders.

Anglo Irish Bank has spent €90m on external advisers between being nationalised in January 2009 and up to September of this year.

The spending was up from "just" €7m in its last four months in private ownership.

Anglo paid €31m to a mix of non-legal and banking consultants after being taken into state hands. The advisers range from US management consultants Bain to property advisers Lisney and Jones Lang LaSalle.

Despite falling staff numbers and public anger about the lack of transparency from banks in general, Anglo Irish Bank paid fees to Cork-based Premier Recruitment and public relations firm Drury in relation to the bailout.

Wall Street and the City of London cashed in on the Irish crisis too, with six investment banks, including JPMorgan and RBS, sharing €10m in fees from Anglo alone.

Nine accountancy firms, including all of the "big four" of KPMG, Ernst & Young, PwC and Deloitte shared almost €15m in fees from Anglo after the State took control.

However it is lawyers that took the hero's portion, splitting €41m in fees between them.

Irish solicitors' firms were among the big winners, with McCann Fitzgerald, A&L Goodbody, Matheson Ormsby Prentice, Arthur Cox and William Fry all named on the long list of legal advisers to Anglo Irish.

The second nationalised lender, Irish Nationwide, paid €3m to Goldman Sachs in 2009 and €1.5m to the US bank in 2010. They were by far the biggest fees paid by the building society.

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