Yesterday's bank statements

Anglo Irish Bank on transactions with IL&P:Given the publication of a statement by Irish Life & Permanent plc this morning (Friday, February 13th), the bank wishes to clarify a number of issues relating to the subject matter of that statement.

Anglo Irish Bank’s annual report and accounts for the year ended September 30th, 2008, which are due to be issued on February 20th, 2009, contain extensive disclosure on funding and liquidity, including detailed maturity analysis across all funding categories. The accounts highlight amounts received from non-bank affiliates of banking groups and concentration in amounts placed with banks covered by the Irish Government guarantee scheme.

Anglo Irish Bank Corporation has had an active counterparty relationship with IL&P for a long period of time. As part of ongoing business activity, this relationship has included placements and receipts of deposits from bank and non-bank affiliates, with transactions categorised as deposits from banks or non-retail customers as appropriate. Since the onset of the global liquidity crisis, this level of business activity intensified to significant levels and reflected the mutual provision of support by each institution. Anglo Irish Bank confirms that it sought and received deposits from ILP during 2008, including the last two weeks of September 2008.

Anglo Irish Bank’s annual report and accounts explain the following in respect of the group’s balance sheet, which totalled €101 billion at September 30th, 2008:

1. Loans and advances to banks included short-term placements of €7.5 billion with IL&P.

2. In the course of its business, Anglo Irish Bank receives deposits from non-bank affiliates of banking groups which are shown within non-retail customer funding.

3. Where no set-off arrangements exist between deposits and loans, accounting standards require that such deposits are recorded separately as liabilities . . .

4. At September 30th, 2008, Anglo Irish Bank had deposits of some €7.3 billion relating to Irish Life Assurance plc.

We wish to clarify that the interbank placements with IL&P were not cash collateral for deposits from Irish Life Assurance plc and no set-off arrangements existed. Anglo Irish Bank confirms that IL&P asked for and was provided with interbank deposits throughout 2008 and significant funding through a €3.45 billion security repurchase arrangement as at June 30th, 2008. Half of this amount matured on July 3rd with the remainder maturing on September 4th. Anglo Irish Bank was asked for and provided to IL&P significant funding through another security repurchase arrangement involving a total of €4.1 billion in December 2008. This arrangement was unwound at their request on December 23rd, 2008. At December 31st, 2008, Anglo Irish Bank had provided funding totalling €0.9 billion to ILP and received funding totalling €0.4 billion from IL&P.

The bank confirms that all transactions have been appropriately recorded in its books and records and financial statements and in its daily, weekly and monthly regulatory returns.

The chairman of Anglo Irish Bank, Donal O’Connor, said:

“The board has instigated a comprehensive review of the process around these transactions including the extent of external consultation relating to them. The board wishes to emphasise that it is fully committed to ensuring that, as a State-owned bank, the highest standards of corporate governance and business ethics be observed in Anglo Irish Bank, in the interests of all its stakeholders.”

IL&P's announcement of Casey's resignation:The chief executive of Irish Life & Permanent plc, Denis Casey, has informed the board of the company that he wishes to resign from the group.

Denis has agreed to remain as acting group chief executive for a transition period to assist the board and the group which is beginning a process of identifying, recruiting and bedding-in a suitable successor.

In informing the board of his decision, Denis thanked the board for their support.

However, he said that, having reflected on the situation with his wife and family overnight and again this morning, he had come to the decision that, regardless of the board’s support, his continued involvement with the group would only serve as a distraction from the group’s efforts to successfully navigate the difficult challenges of today’s market.

The chairman of the board, Gillian Bowler, said that she accepted the notification of resignation with the “utmost regret”. She said: “Denis Casey is a man of the highest integrity and honour. I have always held him in the highest regard as a colleague and as a friend and I know that his decision today – as always – has been prompted by his dedication and loyalty to the company.”

The chairman indicated that the board would immediately proceed to seek a successor for Mr Casey.

In the meantime, the chairman indicated that she would work closely with Denis and the group’s senior management team to support the group’s progress over the coming months and will chair the weekly management meeting.

In addition, she will chair a committee of non-executive directors which is being established immediately to oversee a competition for the recruitment of a new chief executive.

This committee will comprise Danuta Grey, Breffni Byrne, Liam O’Reilly, Margaret Hayes and Ray MacSharry.