INBS saw ‘absolutely no point’ in seeking extra credit risk staff

A former Irish Nationwide Building Society (INBS) manager believed there was "no point" in seeking extra staff to review its credit risk because the bank did not value this work, an inquiry heard on Thursday.

INBS's ex-commercial lending administrator, Frank Casey, clashed at the inquiry into the bank's failure with his former chief executive, Michael Fingleton, over claims that the lender did not hire enough credit review staff.

Cross-examining the former credit administrator, Mr Fingleton asked if Mr Casey had simply decided himself not to bother asking for more staff for his department, without going to Nationwide’s executives.

“I was not going to bother because I knew that there was absolutely no point,” Mr Casey responded during a tense exchange.

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He pointed out that he felt the bank did not value the credit review work he was doing and would not have entertained any request for more staff.

Mr Fingleton argued that as an “independent head of function” in the bank, Mr Casey should have sought the staff he needed.

“Describing myself as head of function when I was the only one doing credit review most of the time is a bit of an overstatement,” Mr Casey told him.

He maintains that he was required to send regular credit review reports to Mr Fingleton between 2006 and 2008.

Salary increase

The former chief executive questioned the number of reports sent and suggested that two were sent following meetings where Mr Casey sought a pay rise. “I did not submit a report in support of a salary increase,” Mr Casey said.

Mr Fingleton then suggested that he himself might have sought the reports when considering the manager’s request for a pay rise.” Yes,” Mr Casey replied, “but it wasn’t successful.”

Irish Nationwide's failure cost the taxpayer more than €5 billion. The inquiry, chaired by solicitor Marian Shanley, is investigating the actions of Mr Fingleton, the society's former finance director John Stanley Purcell; commercial lending manager Tom McMenamin; and the head of its UK operations, Gary McCollum.

Mr Fingleton led Irish Nationwide from 1971 until its demise in 2009. He maintains that the financial crash caused the bank’s failure rather than the way it was run. He is representing himself at the inquiry, which is why he is personally cross-examining witnesses.

Mr Casey joined INBS from Bank of Ireland where, he told the inquiry, about 100 people dealt with credit risk.

Mr Fingleton pointed out that Bank of Ireland was far bigger than Irish Nationwide, while staff there would have dealt with commercial loans, debts due from small business, leases and other credit.

The inquiry will resume on Friday, when Mr Fingleton will continue his cross-examination.