Former manager at Irish Nationwide fined €23,000 and disqualified for 18 years
The Central Bank has fined Tom McMenamin, former manager of commercial lending in Irish Nationwide Building Society (INBS), €23,000 in respect of admitted breaches of financial services law.
He has also been disqualified for 18 years from being in a senior position at a regulated financial service provider.
Mr McMenamin was one of four senior executives at INBS that have been subject to an ongoing public inquiry into matters at INBS between August 2004 and the end of September 2008.
The Central Bank set up a public inquiry in 2015 into the actions of Mr McMenamin, Michael Fingleton, former finance director John Stanley Purcell, and former head of UK lending, Gary McCollum.
The breaches relate to INBS’ multiple failures to adhere to its policies and procedures in relation to commercial lending and credit risk.
The failures involved were: not properly documenting commercial loan applications including borrower information; not following loan approval processes; not following processes in relation to security and loan to value ratios; not monitoring commercial lending; and the credit committee failing to discharge its functions.
In a statement today the Central Bank said the failings admitted by Mr McMenamin demonstrated “a serious lack of due skill, care and diligence in carrying out his role and responsibilities”.
“Mr McMenamin accepts that he participated in a pattern of systemic policy breaches by INBS leading to poor risk management, ineffective governance and an overall culture of high risk lending. In this respect, his actions and/or omissions were not deliberate or dishonest.”
“INBS’ financial instability lead to its ultimate collapse,” the regulator said.
The regulator considers the breaches admitted by Mr McMenamin merited a monetary penalty of €250,000. However, it had regard to Section 33AS(2) of the Central Bank Act 1942 and may not impose a monetary penalty that would be likely to cause Mr McMenamin to be adjudicated bankrupt. In such circumstances and having regard to the current financial position of Mr McMenamin, the regulator imposed a reduced monetary penalty of €23,000.
INBS cost Irish taxpayers €5.4bn in bailouts before its assets were merged with fellow-failed lender Anglo Irish Bank in 2011 to form Irish Bank Resolution Corporation (IBRC).
The IBRC was put into liquidation two years’ later.
The statement from the Central Bank stated that this settlement relates to Mr McMenamin alone and has no effect on the ongoing inquiry into other persons concerned in the management of INBS.