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Shane Ross: A tall tale of two Goggins

GOD forgive me, I thought good thoughts about a trade unionist on Thursday last.





As AIB sought to force 2,500 staff to walk the plank, the big bankers' propaganda machine moved into top gear. The bankers' spin would drive a free marketeer into the arms of Karl Marx.

The bankers and the Government are naming their last crumbling financial edifices "pillar banks". Ahem.

This is the sector that has lost 6,000 jobs since the bank guarantee. Yet they call the survivors of the carnage "pillar banks".

They have brought a country to its knees. Yet they call them "pillar banks".

They have left their shareholders penniless. Yet they call them "pillar banks".

They are currently crucifying small business. Yet they ...

As I listened to Larry Broderick, general secretary of the Irish Bank Officials Association, I found myself nodding. Lining up behind the brethren was a bit of a culture shock.

Perhaps it was because brother Broderick doesn't sport a beard that he seemed to be speaking the language of common sense; but Ireland's banking crisis stretches far beyond the old free market vs workers' republic spat .

Broderick's members are suffering. They are not suffering because of the state of the economy, the budget deficit, government cutbacks, the collapse of Lehman's or any of the other bogus excuses offered for our home-grown problems.

Larry got it in one. The 2,500 victims of AIB targeted for redundancy are "ordinary staff suffering for the mismanagement of the bank's affairs". The suffering is a legacy of management, greed and self-serving accounting.

Broderick was nailing Eugene Sheehy, Gary Kennedy, Dermot Gleeson and other AIB heroes of the last decade. By implication, he was pointing the same finger at Brian Goggin and Richard Burrows -- the pre-crash bosses at the other "pillar", Bank of Ireland.

B of I has already completed one redundancy programme and will soon embark on a second. Today these two hand-picked phoenixes of the banking ashes are on the point of regrouping. The Government has told them to form two "pillar banks". These blackguards are supposed to be our new saviours. The old duopoly is back in the saddle.

Government policy is to reduce the banking sector to two small banks. Bank of Scotland and BNP Paribas are leaving Ireland, badly bruised. EBS has been swallowed up by the bankrupt AIB while the bombed-out Irish Nationwide has been taken over by the unmentionable Anglo. Permanent TSB is an invalid. Ulster Bank is a shadow of its former self.

Let us say good riddance to Irish Nationwide, Anglo, Bank of Scotland and the others that helped to wreck a nation. But are we sure that the successor model will be better?

Welcome to the new cartel. AIB and Bank of Ireland are set to form an alliance to persecute the destitute. Happily for them, Ireland has a toothless Competition Authority that never properly tackled the old banking cartel. The cosy carve-up was challenged at the turn of the century by the foreign invaders. They quickly went native and began to salivate when they found they had tumbled into an unregulated banking jungle. So they went plundering with all the others.

Happy days lasted for a few short years.

Today Larry Broderick's members are the sacrificial lambs. The staff are the last victims after the battered shareholders, customers and taxpayers.

I have to confess that, as a shareholder in Bank of Ireland, I have always hoped that somehow it was more civilised, profitable and dynamic than the rest. That is the myth that they tried to peddle. I was fooled for a while. I even believed that they were a little softer than AIB, less likely to overcharge the customers or sack the staff.

Unfortunately the continued presence of Richie Boucher at the head of this outfit is a constant reminder of the old regime. The Bank of Ireland insider was bounced into office, hand-picked to succeed Brian Goggin.

For years, I lived in hope of good news for the shares. Last week I surfed the net in search of objective news of Bank of Ireland. Luckily, I came across an up-to-date report from NCB stockbrokers.

As I opened the report, I received a nasty shock. There it was on the first page, the name of the author, a Mr Goggin.

NCB might have chosen a more suitably-named analyst to promote the Bank of Ireland's shares than a namesake of the unloved Brian's. At least they could have given him a pseudonym. But no, Mr Goggin is NCB's expert on the Bank of Ireland.

Mr Goggin did what Goggins do best. He put a positive 'Buy' rating on Bank of Ireland, just like his unrelated namesake always did. After coming to this flawed conclusion, he wrote a well-researched report that appeared partly to contradict the absurd optimism that is mandatory for all brokers issuing verdicts on shares.

The good Goggin was critical of the Bank of Ireland's behaviour in dealing with its debts. He gave the B of I stick about continuing with a misleading habit, so beloved of the bad Goggin in the days of high dividends and exaggerated profits. The report lashed the Bank of Ireland's provisions for loans of all segments, insisting that its current coverage of these loans was too low. Deja vu.

Bank of Ireland needs to make higher provisions. Was this practice not the principal cause of the bad Goggin's demise? Did not the B of I and AIB accounts give a vastly inflated profit figure? From these fantasy profits flowed juicy dividends, a rising share price and big pay packets for the bad Goggin's gang.

A glance at the provisions for other banks shows that even AIB has provided more prudently than the B of I's paltry provision of 6 per cent for bad debts. AIB's provision came in at 13 per cent. Ulster's was even higher at 18 per cent, while Bank of Scotland (Ireland) provided 33 per cent. So Bank of Ireland is being more generous to itself than the others.

If the good Goggin is right, Bank of Ireland is about to commit the same sins as the bad Goggin. It takes one to know one.

As a shareholder, I have watched the price fall from over €18 to below 10c, before they recovered to the present fantastic levels of 13c!

So what would a shareholder do, having read the good Goggin's upbeat conclusion? I would read his report carefully, digest some of the excellent analysis and then reject the recommendation to buy the shares. Brokers always say 'buy'.

The good Goggin is an honest Goggin. He has published views he has held of Bank of Ireland since June 2009, a few months after the bad Goggin left. He has been recommending the shares from a high of €2.15 all the way down to their present level of 13c.

His job forbids him from condemning the antics of the banks as remaining contemptible; or that the successors of the old Goggin are plotting a comeback. Nor can he warn Larry Broderick -- as he nobly defends the victims of past management -- that he should now contemplate the ominous arrival of the new cartel.