COME weep with me on Wednesday. Let us enjoy an old-fashioned wake. We will wake Bank of Ireland. At 11am in the O’Reilly Hall at UCD we will begin the obsequies.
Join me there at the AGM.
All true sufferers at the hands of the bank should assemble to wonder and weep.
To weep at our personal loss. And to wonder at how the walking corpses in the court of Bank of Ireland are surviving on life support.
Pretty well, as it happens. Life support is a bit of a doddle. Little has changed at Bank of Ireland. Insiders are struggling to keep it out of public ownership. They have produced a plan to avoid the drop into state hands. It means everyone suffering, except themselves — the incumbent oligarchs.
Small shareholders will be trampled on; taxpayers will pick up the tab for the failed rights issue; employees will face an uncertain future.
The top brass need €5.2bn by the end of July. They will raise more than €2bn from bondholders, about €2.2bn in a rights issue and €1bn from the Government.
They haven’t a snowball’s chance in hell of raising the money from badly burned investors. We have been suckered once too often.
Shareholders would be bonkers to subscribe for the rights issue. Last year’s victims of a similar Bank of Ireland heist have already lost nearly 75 per cent of their money.
Let us not be bitten again, even if the bait is stock at a knockdown price of 10¢.
If there was any sign of fundamental change at the bank, the shares would be cheap at 10¢. Quite the opposite is happening. The bank is circling the wagons.
Take a look at the podium when you enter the O’Reilly Hall. Behold the happy faces of the undertakers.
Scan the top table in search of change. There he will be, governor Pat Molloy, a man who began his career in Bank of Ireland 52 years ago, who retired and was called back. The 72-year-old Pat is standing for re-election.
Beside him will be Richie Boucher, the chief executive. Richie is a living miracle, a survivor of the property frenzy in Bank of Ireland. An insider at the time of the banking crisis, Richie was promoted to the top post by the old guard! Richie is standing for re-election.
Beside Richie will sit new broom Patrick Kennedy, the best bookie in Ireland, the boss at Paddy Power. He was parachuted on to the Bank of Ireland board last year, a voice of the next generation. Just what the board needed, a bit of young blood with no Bank of Ireland pedigree.
Wait a minute. Surely this is not Patrick Kennedy, son of David Kennedy, deputy governor of Bank of Ireland in the Nineties?
And surely his dad, David, was not a director at the time when current governor Pat was managing director?
What a coincidence.
Seated beside Patrick Kennedy will be none other than Heather Ann MacSharry. Great to have a bit of gender balance, a few talented women without any connection with the bank. Heather Ann was a director of Enterprise Ireland and is on the board of the IDA.
Wait a minute. Surely this is not the Heather Ann MacSharry whose father bears one of Ireland’s proudest names? Surely her dad is not Ray MacSharry, former finance minister — who just happens to have been a Bank of Ireland director in the Nineties?
The very same. What a coincidence. Two offspring of recent, living Bank of Ireland directors will be among the undertakers on Wednesday.
And happily, Heather Ann knew Molloy well when she served under his chairmanship at Enterprise Ireland.
Even more happily, Heather Ann will step down on Wednesday in accordance with the bank’s “renewal” plan agreed with Finance Minister Michael Noonan.
Noonan wanted to see the back of any directors who were there before 2008. That would involve quite a cull at Bank of Ireland.
On Wednesday, several will cheat the gallows. Astonishingly, despite the renewal plan, not a single new director is being proposed — while even more astonishingly, several pre-2008 board members are standing for re-election.
We shareholders will all be asked to vote confidence in Molloy (his first term began in 1998), Boucher (2006), John O’Donovan (2002), Rose Hynes (2007) and Jerome Kennedy (2007).
Two other directors, Des Crowley and Dennis Holt, are stepping down from the board, presumably as part of the renewal process. Part of a clean break.
Miraculously, both are retaining lucrative gigs in the bank. Holt will hold on to his €84,000-a-year job as chairman of the bank’s UK subsidiary. Crowley will remain as a director of two BoI UK joint venture companies.
Down at the bank they call this essential “continuity”.
But the last thing Bank of Ireland needs is continuity.
Continuity has destroyed Irish banking.
Nowhere is it more evident than in the small print in the annual accounts. Buried deep in the pages about loans to staff, connections and relations there are some nasty shocks.
Favoured staff are not starved of loans, even if small businesses are. Directors are well treated. Top of the borrowers list is a person linked to the governor himself.
On page 300, it is revealed that at one point during 2010 an unidentified person connected to the governor had loans totalling a staggering €35m.
This “person” can be a spouse, brother, sister, child, a trustee where the director is the principal beneficiary, or even a company he controls.
Shareholders are certainly owed an explanation of how a person connected to the governor can gain such mega- credit from a bank whose lending has dried up elsewhere.
Similarly, loans to key Bank of Ireland personnel rocketed in the past 20 months, rising from €9m in April 2009 to €14m in December 2010. At a time when ordinary customers were being squeezed, the bank was lashing out €14m to 20 insiders. Continuity rules okay.
Ordinary Bank of Ireland staff must be reeling at the favourable treatment for the lucky borrowers at the top — but the hammer blow landed elsewhere. Last year, the Bank of Ireland subsidiary, Bank of Ireland Asset Management, took €5.1m in fees for managing the BoI staff pension funds. Investment managers were milking them. No haircut for the elite.
The same fund manager’s investment performance has been disastrous in recent years. Last week, Bank of Ireland refused to tell me whether this investment manager’s contract was ever put out to tender.
Staff at BoI now see their €2.8bn pension fund devastated by double pillage. The State has decided to join the fund managers. A pension levy of 0.6 per cent on pension funds was passed by the Dail last Thursday.
Lurking in the background at the AGM will be another grinning coffin bearer: auditors PricewaterhouseCoopers are still charging more than €8m in fees. And somehow they retain a gig which has yielded them more than €100m in recent years.
There are still rich pickings for the chief mourners at the wake. The State, the auditors, top staff, the directors and the investment managers have been gorging at the corpse.
You and I are in the coffin.
The bank is dead. Long live the bankers.