Make way for the Good Samaritans in pinstripe suits
COMMITTEE SKETCH:The once haughty bankers tried in vain to convince that they are reformed characters, writes MIRIAM LORD
IT WAS a beautiful experience. We became quite emotional. You could feel the love in the room when the chairmen and chief executives of the two main banks appeared before the Oireachtas Finance Committee.
“We love kittens,” said the men from the Bank of Ireland.
“We hug puppy dogs,” said the men from AIB.
“Nama is great,” they all chirruped. “Thanks ever so much for the money.”
Then they stonewalled in the smoothest possible way. The committee scoffed at their new-found humility, in the nicest possible way.
The top brass were summoned to explain – in the light of the taxpayers’ generosity – when they are going to start lending money again to ordinary people.
Not lending? Us? Surely not? The suits sounded quite hurt at the insinuation.
In the Bank of Ireland corner were chairman Pat Molloy, group chief executive Richie Boucher and retail chief executive Des Crowley. In the AIB corner were executive chairman Dan O’Connor, chief executive Eugene Sheehy and head of the Republic of Ireland division Robbie Henneberry.
A year and a half ago, when the same Oireachtas committee wanted to ask the same banks about the way they conducted their business, fewer chairmen and chief executives deigned to turn up. To add insult to injury, the bankers then proceeded to talk down to the worried politicians, assuring them their fundamentals were sound.
They were talking through their (distressed) assets.
Richie Boucher, before his big promotion, was present back in July of 2008. “Unequivocally,” he declared, “we do not believe there is a Northern Rock lurking in Ireland.” (Correct. There was a whole shed load of them.)
His colleague, David Guinan, stated: “We pride ourselves on the fact that we have been and continue to be very prudent and responsible.” Donal Forde of the AIB offered the following gem: “In regard to lending standards in AIB, we have behaved very responsibly in recent years and we have maintained a very prudent credit stance.”
The highlight of the committee meeting was supplied by Willie McAteer, then executive director of Anglo Irish Bank. “Clearly, the whole perception of Ireland and the negative sentiment towards it are obviously of concern to us. However, this sentiment is not borne out by the fundamentals.”
Here’s another rib-tickler from Willie: “I reject the suggestion that banks have been foolhardy in recklessly lending and driving up values . . . in my experience, the banks have been prudent.”
No wonder the members of the committee were less than convinced by the answers they heard yesterday. Of course, the financial landscape has changed considerably, the banks had to be rescued and Nama established to keep them in pinstripes.
But has the mindset changed? They did their level best to convince the committee they are reformed characters, bending over backwards to help the small business person. They are now Good Samaritan bankers. “We’re helping people to restructure themselves,” smiled Des Crowley, sending out the impression that they are giving away money for nose jobs.
“We are very much into renewing facilities for customers . . . our commitment is to support business people as much as possible,” he said.
“I’m very much here in a listening capacity,” cooed Molloy.
They spoke about the floods: “We are reaching out.” (With a barge pole, one presumes.) Boucher had a novel idea. “We have retail space,” he told the slack-jawed politicians, explaining that people with business ideas could set up shop temporarily in their banks. He mentioned one branch hosting a farmers’ market. Then somebody said, “We are learning to talk to people.”
The politicians disagreed. They waded in with stories of constituents who have been refused facilities or who were granted money by their local branch only to have the decision overturned when word “came down from Dublin”.
Joan Burton of Labour and Kieran O’Donnell of Fine Gael were particularly sceptical.
The AIB boys were next. Henneberry was anxious to cherish the small account holders in AIB with the same warmth and tenderness displayed by the Bank of Ireland. He kept talking about setting “a tone” (warm and fluffy). Staff have been asked “to demonstrate real credit leadership” and have been “empowered to use their discretion”. Sheehy stressed there was no constraint “in terms of liquidity” on the amount of money the Irish operation can lend to small and medium enterprises.
Joan and Kieran got stuck in on Nama, asking if the bank would be using Nama bonds to borrow money at the cheapest possible rate from the ECB. Money that would be passed on to borrowers here. Sheehy indicated that this probably wouldn’t be done, causing deep disquiet. So he shifted position and said the option was there if they chose it.
Both banks insisted that in terms of liquidity, they are more awash than the Fields of Athenry.
The Bank of Ireland went so far as to say it wouldn’t have to go back to the Government next year for a further handout. Sheehy was similarly upbeat about AIB. Kieran O’Donnell summed up the committee’s view: “It looks to me like you feel it’s business as usual. It’s not.”