Three Start Mortgages directors paid a golden handshake of €1m
HOME loans company Start Mortgages shelled out close to €1m in 'golden handshake' payments to departing board members last year, according to accounts filed with the Companies Office.
The former sub-prime lender has a reputation for being among the most aggressive mortgage firms when it comes to repossessing houses.
The latest filing reveals that the loss-making lender paid out €917,000 to former directors as "compensation for loss of office" in the 12 months to the end of March.
Three directors resigned from the board of the company last year, in the wake of the earlier takeover of the company by South Africa's Investec in 2010.
Dermot Nutley stood down from his role as chief executive officer in December. His predecessor, David Ingram, and former chief financial officer Niall Corish, both resigned in June.
No breakdown of how much was paid to individual former directors is provided in the accounts.
Losses at Start Mortgages hit €3.5m this year, up from €2.8m in 2011. The latest surge in losses followed an 80pc spike the previous year. Ironically, Start's accounts show that the cost of servicing its own borrowings means the firm's losses are driven by huge interest payments at the same time as other costs are rising.
Start had an operating income of €8.6m in the year to the end of March compared to €6.8m the previous year but operating costs rose to €10.9m from €8.4m over the same period. Income for Start is largely made up of fees it is paid by a whole series of related companies and subsidiaries whose mortgage books it is paid to manage.
The growing gap between income and its outgoings is something the lender has in common with many cash-strapped home owners who took out big mortgages during the boom.
The latest accounts show Start Mortgages borrowed last year for its working capital, effectively relying on short-term borrowings from parent company Investec to make ends meet.
Start set up in Ireland in 2004 and rapidly expanded during the property boom.
The company focused on lending to so-called 'sub-prime' or non-standard home loan customers and quickly became the biggest player in that part of the market. Since 2010, however, it has refocused its new lending on the mainstream mortgage market.
The company had 65 staff in Ireland at the end of March, up from 58 a year earlier.
The accounts show that Start Mortgages sits at the centre of a complex web of intercompany financing. It owes almost €23m to companies in its group, while it is owed €18m by related companies.
Much of that complexity is linked to the financing of its €1bn mortgage book, but the intercompany borrowings include €4.6m of working capital facilities extended by UK-based The Mortgage Lender, which is part of the Investec group.
That loan was extended to Start in the year to the end of March and is set to expire in January 2015.