A banking expert has told a court it was not normal for a bank to approach customers to offer loans.
Tom Reid, who worked for Ulster Bank for 40 years, also told the trial of three Anglo Irish Bank executives that a credit control committee would also independently assess every personal or business loan based on the risk to the bank and the customer’s ability to make repayments.
Mr Reid, former head of group lending and former director of group risk at Ulster Bank, was a board director for his last four years until he retired in 2004.
He said a normal loan transaction involves a customer approaching its branch manager, business relationship manager or corporate executive with a proposition that they want money for.
“The customer did not approach as would be a normal course business, in fact it was the bank approaching,” he said about the Anglo loan for shares deal.
Anglo’s former chairman Sean FitzPatrick (65), from Greystones, Co Wicklow; former head of finance and risk William McAteer (63), of Rathgar in Dublin; and Pat Whelan (51), of Malahide, Co Dublin, deny 16 counts each of providing unlawful financial assistance to 16 individuals in July 2008 to buy shares in Anglo Irish Bank.
The loan-for-shares deal involved unwinding Sean Quinn’s secret 29pc stake in the bank, build up through contracts for difference (cfds).
The 16 charges relate to loans to six members of the Quinn family and 10 high net worth Anglo clients, who became known as the Maple 10, who were approached by the bank.
The trial previously heard the loan applications never went before Anglo’s credit committee or a non-executive board member for noting.
Mr Whelan, former head of lending (Ireland), also denies being privy to the fraudulent alteration of loan facility letters to seven individuals.
The trial at the Circuit Criminal Court in Dublin continues.