IRISH NATIONWIDE:WHEN IRISH Nationwide members gathered in the RDS in April for its 133rd annual general meeting, they could not have envisaged the manner in which it might be about to lose its independence.
Chairman Michael Walsh spoke that day of Nationwide's "exceptional financial strength" together with the "effectiveness of its chosen lending strategy, which has been developed and successfully implemented over the years".
Irish Nationwide had performed well in 2007, but the relentless tidal wave of negativity towards financial institutions threatened to capsize it and ultimately may push it into the arms of Anglo Irish Bank.
How different it could all have been. For the past number of years, Irish Nationwide's patrician figure Michael Fingleton had been plotting the demutualisation of the building society. The government had even amended legislation, scrapping the need to wait a number of years after demutualisation before selling the bank.
Just as the pathway to a lucrative sale cleared, the markets collapsed as the credit crunch began to bite. At the end of 2007, Irish Nationwide had total assets of €16 billion. Its pre-tax profit had risen 64 per cent to €391 million.
The 50-branch society had increased its profits every year for 36 years but significant exposure to commercial lending and the rising cost of funding left it exposed in the current uncertain environment. Ratings agencies Fitch and Moody's downgraded the society recently, sparking a story from Reuters that it was in trouble. The news agency was forced to retract that claim.
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