Banks satisfied with internal loans

BOTH of the country’s top banks said last night they were satisfied with the status of the loans each has with its directors and senior executives.

AIB’s total lending to directors and other senior executives fell in the last year from just over €18 million to €14.7m, while the top team at Bank of Ireland has borrowings of €6.5m down from €9.8m.

Spokeswomen for the two banks said there were noissues with the loans currently outstanding.

The amounts lent by the country’s two main banks contrasts sharply with lending to top executives in Anglo Irish Banks which was nationalised in January.

Reports in a Dublin newspaper yesterday highlighted that eight senior Anglo executives have outstanding borrowings of €22m with their bank, the accounts for the year to end September 2008 reveal.

Those figures exclude €8m borrowed by former finance director Willie McAteer, who resigned from the bank in January after it emerged former chairman, Seán FitzPatrick, hid over €120m in loans from shareholders over several years, transferring them to Irish Nationwide Building Society, ahead of the end of year audit in Anglo.

They were transferred back once the audit was out of the way. The transfers are now the subject of a number of investigations.

Irish Life & Permanent’s €7.5bn transfer to Anglo to boost the bank’s balance sheet is also at the centre of a separate probe. A probe into the lending of €300m to 10 leading clients of the bank known as the “golden circle” is progressing also.

Those loans were linked to the winding down of the 25% stake held in the bank by businessman Seán Quinn, who lost over €1bn when he was forced to sell off his holding in the troubled financial institutions in which the state now has a total investment of €3.8bn.

A spokesman for the company said he would not comment on the loans of individuals, saying employees who have borrowed from the bank are entitled to the same confidentiality as any other bank customer.

Finance Minister Brian Lenihan said last week when he announced the bill to set up the bad bank said he hoped those probes would be completed without undue delay.

Under the NAMA proposals Anglo will transfer €28bn of bad and doubtful loans to the new bank, AIB €24bn and Bank of Ireland €16bn.

Anglo may require €4bn more in state funding after it transfers €28bn in land and property loans to NAMA.


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