Nationwide determined to complete mutual sale - Fingleton

IRISH NATIONWIDE chief executive Michael Fingleton said the building society was "determined" to complete a trade sale of the mutual "at the earliest opportunity, not a day longer".

Speaking after the building society's annual meeting in Dublin, Mr Fingleton said Irish Nationwide would have to wait until the market turmoil eased before it could complete a sale because the credit crisis was affecting the value of financial institutions.

"The markets will have to normalise. If they normalise this year, then we are on are way. Two years might be a fair long time. But then again who knows.

"One thing is sure is that we are determined to effect a trade sale of Irish Nationwide at the earliest opportunity. We ain't hanging around."

Several members at the meeting criticised the board for not selling the society sooner and realising windfalls for members.

The building society's chairman Michael Walsh said one option being considered was a flotation, but if this happened, the share price would be hurt as institutions would have no opportunity to buy stock. Speaking afterwards, Mr Fingleton dismissed this option.

"If we had a flotation and we were quoted now, our share price would be in bits. We would be having AGMs here with people moaning that their share prices had been decimated. A trade sale is the most effective route for us."

Mr Fingleton declined to say whether he would resign as chief executive if the society was sold. He stepped down as a director when he turned 70 last January under the society's rules.

He dismissed a suggestion from one member who joked at the meeting that Mr Fingleton should stay on for another 70 years. "The genes aren't that good," he said.

"I don't intend to stay there forever. I have a finite life and I intend to enjoy some of it."

Mr Walsh told members that more board members would be appointed now that a sale of the building society wasn't imminent.

Mr Fingleton rejected criticism that the society had been "slow off the block" in selling the business. He said two possible buyers had been close to completing a deal.

He said the European operation of one potential buyer was "all for it" and a deal had been agreed in principle, but the suitor's international board decided to change its worldwide policy, and "everything was put on hold". He said another institution was "very anxious to buy us" and wanted Mr Fingleton to stay on for another two years as a condition of the purchase, which he agreed to, but the deal later fell through. "They were obliged to merge with another major institution for other reasons and that put an end to that."

He said prices in both cases had not been finalised but the broad figure was "something that would be acceptable to us". He said any offers made in the current climate would not represent "fair value" for the shareholders. "We are not going to give the institution away."

He said the society would not look to grow its loan book this year. "We are not out there looking for market share," he said.

Mr Walsh told members that the society's liquidity had remained unchanged since the end of last year. He said deposits accounted for 63 per cent of loans at March 31st, 2008, compared to 59 per cent at the end of last year.

Mr Walsh said it could be two years before markets returned to normal. "We are continuing to work with our advisers to see if there is a way to realise value. We have to unfortunately balance that ambition with where the financial markets are at the current time."

One member criticised Mr Walsh, saying he would encourage more carpetbaggers to place money on deposit to quality for a windfall from a future sale, which would dilute windfalls for others.

Mr Fingleton told reporters his wife qualified for a windfall last year. "I don't want any more carpetbaggers coming in," he said.