Report confirms €7bn IL&P deposit

ANGLO Irish Bank’s annual report confirms the fact that it had well over €7 billion on deposit from an Irish Life & Permanent (IL&P) subsidiary at the 30 September, 2008, its financial year end.

That disclosure cost the top three executives in IL&P their jobs.

Some dispute over how Anglo treated the deposit has emerged in the meantime, with strong allegations being made that Anglo used the funds to bolster its weak balance sheet in order to help it portray a stronger picture of the bank to investors than was the case in reality.

The emergence of the loan from IL&P led to the resignation of Denis Casey from IL&P last week as a furious Minister for Finance Brian Lenihan, demanded that heads should roll at the highest level& in the institution.

Casey’s two closest associates had been forced to quit their jobs while chairwoman Gillian Bowler’s position also looked to be hanging by a thread.

In a statement after the sackings, the IL&P board said the actions taken — though done with the best intentions — were totally inappropriate and had completely misread the suggestions from the Central Bank and the regulator that banks needed to support one another during the huge pressure that came on them in September, which ultimately forced the Government to guarantee €440bn of the loans and deposits in the six Irish-owned financial institutions on 29 September.

On 30 September 2008 Anglo’s balance sheet included €7.5bn of short term interbank placements with Irish Life & Permanent plc and €7.3bn of non-retail customer deposits.

Those and other disclosure have done enormous damage to Anglo’s reputation, which, Mr Lenihan said, he was determined to overcome.

Anglo Irish Bank is a major financial institution, the viability is of which is of “systemic importance to Ireland.

Anglo has a balance sheet of some €100bn with a substantial deposit base which the state is determined to safeguard,” he said.

The publication of the bank’s annual accounts yesterday marked a “watershed — an effective break between the old and the new Anglo,” he said.

“The publication of these accounts concludes a regrettable chapter in the history of Anglo Irish Bank. With a new leadership structure in place, the bank can set about re-establishing itself as a reputable financial service provider,” the minister said.

The accounts “will rightly be the subject of intense public scrutiny in light of the disclosure of inappropriate corporate governance practices in the bank,” he added.

More in this section

War of Independence Podcast

A special four-part series hosted by Mick Clifford

Available on

Commemorating 100 years since the War of Independence

Home Delivery


Have the Irish Examiner delivered to your door. No delivery charge. Just pay the cover price.