Shareholders to vent fury at banking upheaval

SHAREHOLDERS IN three of the country’s guaranteed financial institutions will be able to vent their anger at the upheaval within Irish banking next week as Irish Nationwide, Allied Irish Banks (AIB) and Irish Life & Permanent (ILP) hold their annual meetings.

First up is Irish Nationwide’s annual meeting in the RDS in Dublin on Tuesday afternoon, where members will likely voice concern about the building society’s ability to deal with its heavy exposure to the commercial property and development sectors.

Members were told at last year’s meeting that it would be two years before the building society would be sold, owing to the global financial crisis, before they could net a windfall.

How things have changed. The building society is relying heavily on the State’s bank guarantee to raise €2.2 billion in funding coming due to investors this year.

This amounts to more than a fifth of the society’s €10.4 billion loan book. Irish Nationwide wrote off €464 million on loans, mostly to commercial property and development, leaving it with a pretax loss of €280 million for 2008.

This will be the first time members will be addressed by Danny Kitchen, who replaced Dr Michael Walsh as Irish Nationwide chairman in February.

Mr Kitchen is also serving as acting chief executive since Michael Fingleton retired at the end of last month after 37 years running the building society.

Mr Fingleton is likely to be the focus of discussion as members raise the circumstances surrounding the payment of a €1 million bonus in November, weeks after the Government agreed to prop up the society and other Irish lenders with the bank guarantee. Mr Fingleton has since agreed to repay the bonus, but his €27.6 million pension package is expected to feature in questions.

IL&P’s annual meeting on Friday will follow AIB’s egm on Wednesday morning and the bank’s annual meeting that afternoon. IL&P is expected to release an interim management statement on Friday morning which should provide an update on whether Permanent TSB has experienced any sharp increase in arrears on home loans, which account for most of the company’s €39.9 billion loans.

The company, which has no development loans, said at its 2008 annual results last March that it expects to write off between €480 million and €650 million on loans from 2009 to 2011.

The controversial temporary transfer of €7.5 billion in deposits from ILP into Anglo Irish last September is also expected to be the source of much debate. The deposits led to the resignations of finance director Peter Fitzpatrick and head of treasury David Gantly initially in February and later chief executive Denis Casey.

Chairwoman Gillian Bowler will face questions about her future position with the company and the board’s decision to decline her resignation during the controversy.