AIB loan allegations source is anonymous
Whistleblower made claims to SSM and Central Bank
AIB. A whistleblower has claimed the bank overstated progress on dealing with problem loans in order to suggest greater progress had been made in restructuring its debts. Photograph: Eric Luke
The AIB whistleblower has made their allegations to financial regulators on an anonymous basis, The Irish Times has learned.
The allegations relate to the way AIB has reported its problem loans and were made last week to both the Central Bank and the Single Supervisory Mechanism, a European Central Bank arm that has responsibility for direct supervision of the Irish bank.
It is understood the whistleblower did not reveal their identity to the regulators.
Informants are not under any obligation to disclose personal data and the ECB offers the possibility to submit breach reports anonymously.
Contact detailsThe ECB’s guidelines for reporting a breach state that although anonymous reports are accepted, “providing contact details allows the ECB to clarify aspects of the submission or request further information if necessary”.
The regulator “may refrain from follow-up measures if . . . the ECB cannot gather further information because the report was submitted anonymously”.
The SSM has not commented on the nature of the allegations but they are believed to relate to a division of the bank that handles bad loans, called the Financial Solutions Group (FSG).
The individual suggested AIB had overstated progress on dealing with problem loans in order to suggest greater progress had been made in restructuring its debts.
Restructures clusteredThe whistleblower is reported to have said restructures were clustered at the end of each month and the end of each quarter, indicating the bank was under pressure to hit targets in advance of progress.
FSG was led by AIB executive Brendan O’Connor, who now runs its UK operation, from February 2013 to October 2015, and is headed now by Jim O’Keeffe.
At peak, the FSG group employed more than 2,000 staff and managed a portfolio of loans valued at close to €25 billion.
It has about 1,000 staff, managing problem loans of €13 billion along with some performing loans
Earlier this week, Irish MEP Brian Hayes asked the SSM in Frankfurt to clarify if it was investigating the whistleblower’s complaint.
No comment was available on Friday from AIB, the Central Bank or the SSM in connection with the whistleblower claims.
It is understood AIB has communicated with regulators on the matter in recent days.