Nationwide chairman resigns over bank’s loans to FitzPatrick

FOLLOWING an emergency board meeting yesterday Irish Nationwide (INBS) said it regretted the decision of Dr Michael Walsh to quit as company chairman.

His resignation last night followed disclosures that INBS lent millions in dollars and sterling to the former chairman of Anglo Irish Bank, Sean FitzPatrick, to help hide more than e120 million in borrowings from Anglo.

The board said “there were no commercial issues” for his (Mr Walsh’s) unexpected resignation and accepted “with great regret” his resignation from the board and as director of the society.

Vice-chairman Terence J Cooney has been appointed acting chairman until a replacement is found for Dr Walsh, the statement from the board said.

Meanwhile a spokeswoman for the financial regulator said: “We expect Irish Nationwide to appoint a new chairman with immediate effect.”

Dr Walsh is a former professor of banking at University College Dublin and an executive director of private equity firm International Investment and Underwriting, owned by financier Dermot Desmond.

His resignation means INBS is the fourth Irish lending institution to be hit by a shakeout at the top, as domestic and international turmoil undermines the status of Irish banks.

Finance Minister Brian Lenihan has said he expects Bank of Ireland to name a new chief executive within three weeks. That move would bring forward the departure of outgoing chief executive Brian Goggin, who was set to retire this summer, a year earlier than planned.

It has been speculated that Mark Duffy, who is to resign as chief executive of Bank of Scotland Ireland may step into Goggin’s shoes. Within the bank, Richie Boucher, head of BOI’s Irish operations and the head of its British business, Des Crowley, are understood to have already been interviewed.

Credit rating agency Moody’s downgraded the Nationwide’s debt ratings to BAA3, one rung above speculative, or “junk” status. Moody’s said INBS needed to cut its large exposure to commercial property.

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