Panama Papers: Inside Anglo’s ‘smooth and quiet’ Austrian business
Irish bank’s Vienna branch offered clients a ‘lower profile’ alternative to Switzerland
The former Anglo Irish Bank offices in Dublin. File photograph: Frank Miller/The Irish Times
It was not a surprise that Anglo Irish Bank’s branch in Austria was being recommended by a Panama-based law firm to clients looking to conceal the ownership of assets.
The Irish bank’s Vienna operation had in the 2000s been aggressively soliciting for business from wealthy depositors on the basis that their money would remain a secret if deposited in Austria.
The branch featured in a list of seven banks recommended by Mossack Fonseca, the Panamanian law firm that helped the rich and powerful conceal the ownership and control of assets, according to leaked documents obtained by the International Consortium of Investigative Journalists, of which The Irish Times is a partner.
Anglo Irish Bank (Austria) appeared in other records leaked to the Washington-based consortium three years ago from a Singapore company that helped clients set up offshore companies and trusts in the British Virgin Islands, the Cook Islands and other tax havens.
One Anglo executive in Vienna boasted in an email to Portcullis Trustnet in Singapore in 2006 that Austria “deliberately keeps a lower profile” than the world’s private banking centre, Switzerland, and that investors appreciated “the smooth and quiet way in which the Austrian bank conducts business with their customers”.
Anglo, the now defunct lender that has cost the Irish public €29 billion, bought the bank from Royal Bank of Canada in 1995 as part of a strategy to add a third “pillar” of revenue from wealth management and private banking to complement Anglo’s lending and treasury businesses.
In 2007, Anglo decided to offload the Austria subsidiary and its €600 million in deposits as part of a strategy to sell wealth management and other assets outside the core area of lending.
Privately, concerns were expressed during conversations between Anglo’s senior management and the Financial Regulator about the source of deposits in Austria.
There were fears that it might draw the Irish bank into a tax evasion controversy, perhaps involving US customers initially drawn to Vienna through its one-time Canadian owners.
The Austrian bank was embroiled in a scandal in 2010 involving an alleged €2 billion cross-border Mafia money-laundering racket, in a case taken by Italian government prosecutors in the mid-2000s.
Although the disposal of a deposit-taking business at a time when Anglo required deposits was considered unusual, insiders say that the sale proceeded because the process was already well-advanced and that pulling it may have jeopardised a future sale of the business.