Tuesday 20 March 2018

Anglo started calling 'skittish' customers after major withdrawals following St Patrick's Day massacre, court hears

Left to right, William McAteer, Denis Casey, John Bowe, and Peter Fitzpatrick
Left to right, William McAteer, Denis Casey, John Bowe, and Peter Fitzpatrick

By Eimear Cotter

ANGLO Irish Bank started calling "skittish" customers after the bank had "15 significant withdrawals in three days" following the so-called St Patrick's Day massacre when the bank's share price fell significantly, a trial has heard.

The phone calls were to be made by the Irish bank's corporate funding desk in late March 2008, just days before Anglo was due to post its half-year results, and were revealed in a conference call played to the jury this morning.

Anglo's former Director of Treasury, Matt Cullen, was continuing to give evidence in the trial of former Anglo executives John Bowe (52), from Glasnevin, Dublin, and William McAteer (65), of Greenrath, Tipperary town, Co Tipperary; and former IL&P executives Denis Casey (56), of Raheny, and Peter Fitzpatrick (63), of Malahide, both Dublin.

They have denied conspiring to mislead existing and potential investors, lenders and depositors by engaging in transactions between Anglo Irish Bank, Irish Life and Permanent (IL&P) and Irish Life Assurance to make Anglo appear €7.2bn better off than it was.

In the recording played to the jury, Mr Cullen is heard talking about a proposal to complete a "back to back" transaction with IL&P.

"Look, we will give them half a billion and they will give it back in the name of the asset manager", he is recorded as saying in the conference call which included Mr Bowe and Peter Fitzgerald, Anglo's Director of Corporate and Retail Treasury.

Former Anglo finance director Willie McAteer
Former Anglo finance director Willie McAteer
Former Anglo executive Denis Casey. Pic:Mark Condren
Former Anglo Irish head of capital markets John Bowe
Former director of finance of Irish Life and Permanent Peter Fitzpatrick. Photo: Courtpix

Mr Cullen also suggests that Anglo CEO David Drumm should call IL&P and tell them that the transaction is appreciated.

Mr Cullen further says that IL&P should be asked if they would do more.

"Only issue from a regulator point of view, and the regulator is more or less, you know, saying I'm not looking", Mr Bowe is recorded as saying.

The conference call which took place on March 25, 2008 was played to the jury just before lunch.

Mr Cullen spent most of the morning going through a series of emails sent amongst Anglo staff between May and September 2008.

The emails contain a series of funding target reports, which were circulated amongst senior Anglo staff, prior to a weekly Friday planning meeting in Drumm's office.

The emails highlight the state of the funding initiatives which staff were asked to explore in reparation for Anglo's year end in September 2008.

The emails and the funding target reports show that from an initial number of 29, there were only three potential funding initiatives by September 16, 2008. The funding initiatives were €6bn from IL&P, some €500 million from Merrill and €200 from 'repo'.

Mr Cullen previously said the executive directors of the bank were aware of the purpose of the IL&P transactions and he assumed the board was also aware.

The scheme involved money being transferred by Anglo to IL&P. It would then be put back on deposit with Anglo by Irish Life Assurance so it would appear in Anglo's accounts as a corporate deposit.

Non-bank, or corporate, deposits have a greater value from the point of view of the market as they were considered "stickier" or more secure, the trial has heard.

The trial continues.

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