Anglo Irish Bank – a lesson in an Irish solution…

Chairman of Anglo Irish Bank Sean Fitzpatrick has resigned. The €87m figure could lead to serious problems for the bank, with the bank now only worth €250m in total.

The Financial Regulator has known for months, so the Government has known for months, and still they went ahead and guaranteed Anglo Irish Bank. We could see the Government stepping in to save Anglo.

And this very interesting stuff from Shane Ross from last year about the relationship between the DDDA and Anglo.

The Board of Directors of Anglo Irish Bank Corporation plc announces that Mr. Sean FitzPatrick has tendered his resignation as Chairman with immediate effect. The Board has accepted his resignation with regret. The Board also announces Mr. Lar Bradshaw, a non-executive Director, has tendered his resignation. The Board has accepted Mr. Bradshaw’s resignation with regret.

Mr. Donal O’Connor was nominated and appointed Chairman, in succession to Sean FitzPatrick at a Board Meeting this afternoon. He joined the Board as a Non-executive Director in June 2008. He was Senior Partner of PWC for 12 years until June, 2007, and a member of the Global Board of PWC for 6 years to September, 2008.

Mr. FitzPatrick’s decision to resign is based on the fact that, over a period of eight years to 2007 he temporarily transferred loans with Anglo Irish Bank to another bank prior to the Group’s year end. This transfer of loans did not breach banking or legal regulations. It was, however, inappropriate from a transparency point of view.

At 30th September, 2008 , the loans to Sean FitzPatrick totalled €87 million. The total for Directors’ loans at that date was €150 million.

Mr. Bradshaw’s decision is based on the fact that a loan, which he held jointly with Mr. FitzPatrick, was temporarily transferred to another bank prior to year end. While Mr. Bradshaw was unaware that this transfer took place, he believes that it is in the Bank’s best interest that he should resign.

The Board has advised the Financial Regulator and the Department of Finance of the issue and of Mr. FitzPatrick’s and Mr. Bradshaw’s decisions.

All of the other Directors have confirmed that they have not engaged in this or in any other inappropriate action in relation to their loans. All Directors’ loans are agreed on normal commercial terms and conditions.

The Board of Directors has decided to initiate a formal review of governance including policy and practice relating to the directors loans. This review will be carried out using independent expertise.

It is important to state that the Annual Reports of the Bank for each of the years in question represent a true and fair view of the Bank. The disclosures in each of the annual reports were in full compliance with Companies Acts requirements.