Public interest directors say they were never given any guidelines by minister

The two Government-appointed directors at Bank of Ireland have had no formal contact with the Minister for Finance, his department or the Central Bank since taking up their positions on the board nearly four years ago, an Oireachtas committee heard yesterday.

Former minister for agriculture Joe Walsh and former senior civil servant Tom Considine were appointed to the board of the bailed-out bank in January 2009 at the behest of then minister for finance Brian Lenihan to represent the taxpayer.

However, they told the Committee on Finance, Public Expenditure and Reform yesterday that at the time of their appointments they were never given any terms of reference regarding their postings.

They also said that no formal structures for reporting issues regarding the bank to the Minister or anyone else in the department or the Central Bank had ever been put in place.

Both men defended their roles as directors in the 15 per cent State-owned bank, saying they had promoted the public interest at all times, and had spearheaded changes in areas of corporate governance at the bank.

Arrears

On the issue of mortgage arrears, Mr Walsh said the bank was offering mortgage restructuring options to between 400 and 500 customers per week

He said more than 700 staff across the group were now involved in the management of mortgage arrears.

The bank, which controls about 20 per cent of the Irish mortgage market, had restructured 16,000 mortgages and over 86 per cent of customers whose mortgages had been restructured were meeting their contracted payments, Mr Walsh said.

“Bank of Ireland has mobilised very significantly around the management of mortgage arrears.”

Mr Considine said that in September 2008 the State was guaranteeing €136 billion of liabilities at the bank and that this had fallen to €26 billion as of last month.

He said peak losses at the bank were not reached until 2010, when it recorded an underlying loss of €3.5 billion.

In tetchy exchanges with committee chairman Ciarán Lynch, both men were repeatedly asked what their positions were on the issue of debt relief for distressed mortgage holders and whether they agreed with Bank of Ireland boss Richie Boucher, who has ruled out debt forgiveness.

Insolvency

Mr Walsh said the bank wouldcomply with the provisions of the personal insolvency legislation. “If that means that when all avenues have been exhausted in terms of people in distressed mortgages and the loan is irrecoverable . . . well then down in my side of the country they say you can’t knock blood out of a turnip and that has to be the case.”