Business Irish

Sunday 25 February 2018

INBS staff earned less than industrial wage

Joe Brennan

STAFF at Irish Nationwide, where former boss Micheal Fingleton bagged €2.4m in 2008, earned an average of just €33,000 -- less than the average industrial wage -- last year.

Mr Fingleton earned €221,000 for his last four months in charge of the troubled society in early 2009, according to the beleaguered society's annual report.

The report shows total wages and salaries among Irish Nationwide's 399 staff came to €13.2m last year.

Average earnings across Ireland currently stand at about €36,000, according to the latest data from the Central Statistics Office.

The bottom-of-the-league employee salaries at Nationwide partly explain how Mr Fingleton maintained costs at an unheard-of low in western banking.

At the other end of the scale, Anglo's average salary stood at almost €68,000 last year, although down from €76,700 for 2008.

At one stage, Nationwide's costs stood at 9pc of its income, while other Irish banks struggled to drag it below 50pc.

The society's annual report shows staff had €43m out on loan at the end of last December, but that it has set aside €3.2m to cover impaired loans.

The level of staff loans was down from €49m for 2008.

Mr Fingleton had a €1.3m loan out from the society at the time he retired last April, but this has since been repaid in full.

He has still continued to refuse to pay back the controversial €1m bonus he was given in 2008.

New Irish Nationwide chief executive Gerry McGinn this week expressed shock at how the society had been run for years with an extremely small team of managers and top lenders.

He said there had been a "dearth of experienced, skilled lenders" at the society.

The entire €5bn UK loan book -- almost of the entire portfolio -- had been managed by just two lenders, with four administration staff.

A total of just 11 key people looked after €8.5bn of commercial loans.

The annual report -- the first Mr Fingleton did not preside over in 37 years -- said "the society's past commercial lending strategy, which was largely based on asset values, has proved to be significantly flawed".

It added: "The failure of this strategy is reflected in significantly impaired provisions in 2008 and 2009."

On Monday, Irish Nationwide revealed it posted a €2.5bn loss in 2009, having written down an unprecedented third of its entire loan book over the space of two years.

Loan losses came to €2.8bn last year, having jumped ten-fold from 2008.

The society, which transformed itself from lowly mortgage lender to a property bank in the space of a decade, has required a €2.7bn bailout from taxpayers to help it stomach the massive losses.

It is transferring its entire €8.5bn commercial property portfolio to NAMA.

Irish Independent

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