New chairman promises fresh momentum as Drumm bows out

THE fallout from the Anglo Irish Bank loan controversy continued yesterday with the resignation of David Drumm as chief executive.

His resignation followed on from Anglo’s chairman, Sean Fitzpatrick, stepping down on Thursday night after admitting hiding loans of €87 million from the bank and transferring them to another bank — the Irish Nationwide Building Society.

Mr Fitzpatrick was replaced with immediate effect on Thursday by Donal O’Connor, who said yesterday that Mr Drumm’s decision would ensure that Anglo could “move forward with new momentum”.

The Anglo board of directors has already commenced its search for a new chief executive, and until one is found Mr Drumm will stay on through the transition phase.

Mr Drumm said that his decision to step down was “appropriate” given the previous evening’s announcement and “given the strong statement of support for the bank and its recapitalisation programme by the Minister for Finance”.

“Good progress is being made on the recapitalisation. It is undoubtedly in the best interests of Anglo that a new chief executive is appointed to lead the bank through its next phase of development.

“The appointment of Donal O’Connor as chairman, together with a new chief executive, augers well for the bank and for all its stakeholders. It gives the bank fresh impetus and an upward trajectory,” Mr Drumm said.

Mr O’Connor — a former senior partner at PricewaterhouseCoopers — said that the management transition at Anglo will be orderly, and that the bank “will progress well through this important time”.

He is also understood to be keen to examine Anglo’s policy of granting loans to directors.

Irish Nationwide emerged yesterday as the institution where Mr FitzPatrick transferred his loans. While a spokesperson declined to formally comment, the bank did not deny its inclusion in the affair.

However, according to one industry source the “inappropriateness” of the matter only refers to the actions of Mr FitzPatrick and Anglo Irish Bank officials — fellow director, Lar Bradshaw has also resigned over loan transferals — and that Irish Nationwide’s involvement was only providing an everyday business service as it would for any client.