FitzPatrick loans exceeded €90m

ANGLO Irish Bank is expected to tell shareholders today that loans to former chairman, Sean FitzPatrick, actually exceeded €90 million, but they are “asset backed” and not a cause of concern for the bank’s financial stability.

It was previously stated that the controversial hidden loans amounted to €87m. A spokesperson for Anglo Irish refused to comment last night, but said the matter would be addressed at today’s extraordinary general meeting.

In addition, Anglo was last night poised to name Declan Quilligan as its next chief executive, succeeding David Drumm who resigned last month.

Mr Quilligan’s appointment was due mere hours before this morning’s potentially explosive meeting, where shareholders are chiefly assembling to vote on the Government’s €1.5 billion recapitalisation plan for the bank, but presumably also to grill the board over issues including the controversial loans to directors and the collapse in Anglo’s share price and overall market value in the past 12 months.

Mr Drumm resigned in the wake of that controversy last month, not long after Mr FitzPatrick announced his own resignation. Indeed, the appointment of Mr Quilligan — recently head of Anglo’s British division — may also raise the heckles of shareholders. The failure to appoint an interim chief executive while a permanent replacement from outside was found and instead promoting from within, is hardly likely to boost confidence amongst Anglo’s punch-drunk shareholder base.

Earlier this week, another obstacle in the way of the recapitalisation plan, that would see the Government take a 75% stake in Anglo, was removed when the European Commission formally approved the idea.

Yesterday, international credit ratings agency Fitch downgraded five Irish financial institutions — Anglo Irish as well as AIB, Irish Life & Permanent, Bank of Ireland, Irish Nationwide Building Society and the EBS.

More bad news for Anglo came with NCB stockbrokers forecasting the bank may need to raise further funds if commercial property prices continue to fall. Its share price fell a further 6% yesterday to 22c.

Additionally, financial ombudsman Joe Meade yesterday said that he would not be adverse to investigating management dealings at Anglo, if his remit was widened.

He said Mr FitzPatrick could allegedly have deceived his board, shareholders and the Irish public.

Also yesterday, Taoiseach Brian Cowen stressed the Government’s commitment to Anglo, from which Fine Gael has already withdrawn its support.

He repeated the comments of Finance Minister Brian Lenihan before Christmas, that Anglo was of “systemic importance” to the Irish financial system” and has the full support of the Government.