Report into NIB may face delays

PUBLICATION of the report into the National Irish Bank’s affairs may be delayed, it emerged yesterday.

Tomorrow, NIB and persons implicated in the report will go before Mr Justice Peter Kelly to seek copies of the report.

The report took six years to compile as inspectors delved into allegations of overcharging of customers, the illegal transfer of money from customers' accounts and the Clerical Medical Insurance (CMI) scam that directed the bank's clients towards false non-resident accounts in the Isle of Man to evade tax.

If Mr Justice Kelly decides to publish the report, he has been informed by the Director of Corporate Enforcement that it could be July 30, 2004 at the earliest before the report may be put into the public domain.

It is believed that over 20 current and former NIB employees faced serious investigation in relation to the allegations.

Since the investigation began, up to 30 people have been deployed full time to help the inspectors former Supreme Court Judge John Blayney and accountant Tom Grace to conduct the inquiry.

It is understood that it has cost NIB €55 million to deliver the report while €50 million has been recovered by the Revenue from accountants CMI.

Earlier this year, TD Beverly Flynn was expelled from Fianna Fáil after losing a libel case against RTÉ, which had alleged she encouraged people to evade tax through the use of the Isle of Man CMI facility.

Speculation has been rife that NIB will be sold off by parent, National Australia Bank (NAB), once the investigation is made public.

Royal Bank of Scotland (RBOS) has been a strong favourite to buy the bank.

The group, which already owns Ulster Bank and First Active in Ireland, promotes competition among its own subsidiaries. The purchase of First Active last year for nearly €900m suggested RBOS boss Fred Goodwin could well be persuaded to buy NIB.

Halifax Bank of Scotland (HBOS) is the other top contender, according to some analysts.

It was also felt that with NAB recovering form a rogue trader scandal in Australia, it was about to jettison some British and Irish operations as part of a strategic regrouping.

If it was common knowledge the bank wanted out of the Northern Hemisphere, then that would damage the sale price.

However, chief executive of NAB John Stewart said in May, after NAB's results were published, that a sale was not on the cards.

"Right now I don't think it is the right thing. We should repair these banks we can create more value".

It has also been suggested that NIB could be hard to sell, even at a knock-down price.

Overall it has just 6% of the Irish market and is no longer seen as a strategic player by competitors.

One source close to RBOS told this newspaper the bank was not interested in buying a lame duck bank to further its ambitious strategy in the Irish market.

HBOS is also thought to be ambivalent about NIB.