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Ex-AIB Insider Lands at Anglo

Posted on: May 30th, 2010

THE scene: Anglo Irish Bank HQ, St Stephen’s Green, Dublin 2. Location: The Sean FitzPatrick Memorial Room for Humble Bankers.

Interviewers: Outgoing Anglo Irish Bank chairman Donal O’Connor and current director Maurice Keane (ex-Bank of Ireland)

Interviewee: Gary Kennedy (ex-finance director AIB)

Vacancy: A seat on the board of Anglo

Donal O’Connor (Anglo):

Great to see you Gary. We haven’t met for days, not since the monthly directors’ meeting at Elan. You played a blinder at the last audit committee. It will be wonderful to have you here as a director, too. Such an honour to welcome another banker with real form.

Gary Kennedy (ex-AIB):

I cannot wait. Good of you to interview me. It’s great to be one of the insiders again. Did you read the latest TASC report about the ‘golden circle’? I featured in the 11 best-connected individuals on the country’s boards. When you give me this gig I shall be in the top five.

Maurice Keane (ex-BoI):

Congratulations Gary. You were a genius when you were number two at AIB. All of us at the Bank of Ireland really admired your flair. You were never frightened of expanding the balance sheet. Tell me, what other boards have you landed since leaving?

Gary:

Elan – where I share some of the spoils with Donal — is the plum job. Last year, they paid me $84,000. Wonderful for both of us to be rewarded in dollars now that the euro is sliding. How many does that mean you have totted up Donal? My second-best gig is Greencore. Not as good a number as Elan. Just 43 grand. And it’s in lousy euros. But I have a few others, like Friends First and Travelport.

Donal:

We are a bit worried you won’t have time to squeeze in our board meetings with all your other directorships. We met over 50 times last year.

Gary:

No problem. At AIB, I used to jet off to board meetings in Poland and then rush across the Atlantic to board meetings in Allfirst. (I was so busy I even used Concorde and a private jet.)

Donal:

Allfirst? Isn’t that the bank with the rogue trader Rusnak that lost $690m?

Gary:

Yes, that’s right. Seems like chickenfeed now. Even though I was on the board of Allfirst for years I just didn’t see it coming. But it was great experience of handling a crisis.

Maurice:

What a well-rounded banker you are. You have met some rogues in your travels. Any notable fellow Greencore directors whose names you would like to drop?

Gary:

Greencore has always been full of stars. Seanie Fitz was the best known. Yes, I sat on the Greencore board with Seanie when he was at the height of his powers.

Donal (coughs):

Try and keep that under your hat. Seanie is not the flavour of the month around this building. Any other, er . . . high achievers on the Greencore board with you?

Gary:

Sorry, I understood Seanie was an old friend of yours, Donal. Just between these four walls. You asked are there any other top calibre guys at Greencore? Yes. Chairman Ned Sullivan is a genius. Perhaps you should ask him to join us on the board of Anglo?

Donal (coughs):

Ahem. . . actually, he was on the board here with Seanie and me. Ned is no longer popular around here either. He departed in the purge following the resignations of Seanie, David Drumm and Willie McAteer. No need to mention Ned’s name.

Maurice:

Enough of that. It’s wonderful that you are so well connected, Gary, a bit like myself as a one-time Bank of Ireland boss. I still sit on the board of DCC with your old AIB chief Michael Buckley. Come to think of it, we will be looking for a new chairman when Michael goes. You might bear it in mind?

Gary:

Nothing surer. How much do they pay? Michael was my mentor at AIB. If he had been in charge when I left, the settlement might have been far more generous.

Maurice:

You got a settlement on your departure? Proper order. Was it generous?

Gary:

Yes, it was probably a record for a guy of my age — I was only 48 — leaving a bank in his prime. They gave me €579,000 in compensation and topped up my pension with €2.1m. I have to admit that I was even staggered myself.

Donal (gulps):

Quite a coup, even by banking standards. Why on earth did they let a man of your talents go? Anything else?

Gary:

They agreed to pay my legal fees of €150,000. There was a bit of a rumpus when I departed. Oh yes, they also gave me a consultancy gig for three years. I was “special adviser on finance and risk”.

Maurice:

Risk? You were the adviser on risk, you say? I’d mention that sotto voce. AIB has a dodgy record on risk. Hope that was not after 2005 when the property market went totally berserk?

Gary:

Oh yes, the special adviser’s job was agreed in 2005, but don’t worry. I had plenty of experience of risk. I took plenty of risk. I was AIB finance director in the eight years before that, from 1997 to 2005. I presided over the balance sheet as it ballooned into the stratosphere. We were doing a bomb when I left in 2005. Nothing could stand in our way. I blame Lehmans for everything. Without Lehmans there would have been no need for all the panic measures taken by the government.

Maurice:

Good fighting talk. So you must have an encyclopaedic knowledge of property bubbles? Exactly what we need. Your AIB chased Anglo into the property market. You could fill us in on all the thinking at AIB at the time. Obviously the rot set in after you left?

Gary:

Er, not exactly. I was finance director at AIB during both the overcharging scandals. If there are any overcharging problems in Anglo, I have the experience to advise on the correct action. Virtually every disaster that AIB encountered happened on my watch. And despite all our antics we were never fined a penny by the watchdog. Not bad, eh?

Donal:

But we have a new regulator now and Matthew Elderfield seems a little less flexible.

Gary:

Ask him to lunch. Or a game of golf. At AIB they used to ask the regulators to a day’s golf at Portmarnock. We always let them win, you know. We called it “customers’ golf”. We even gave them golf balls with the AIB logo on them.

Donal:

This is wonderful. You are ideal. Old friends are best. You know all the insiders round town. You are in the Richie Boucher Bank of Ireland mould and you must know AIB’s Colm Doherty like the back of your hand from your days there. You were at AIB when virtually everything that could possibly go wrong went wrong. And to think we nearly set about finding a fresh face!

Maurice:

One last point, Gary, did you bring your references along with you? Just a formality of course.

Gary (swallows hard):

Er. . . this one is from Seanie to say what a good colleague I was on the Greencore board. The second is from Ned to confirm it, saying I’d be ideal for Anglo, now he has left.

Maurice:

And the third?

Gary:

The third is from you, Donal. It says how well we have been getting on down at the Elan audit committee.

Maurice:

Ahh. . . we will not be needing them.