WELCOME to the third farce in banking. Yes, that appears to be one of the Government’s glib solutions to the banking crisis.
The plan of action is to merge EBS, Irish Nationwide and Irish Life’s banking arm into a third force. Anyone else who wants to join in is welcome.
Halifax Bank of Scotland took one look at the idea and promptly left the country. But the Government still loves the project: lump all the troubled minnows into one pot.
Unfortunately three troubled minnows cannibalising each other equals just one more drowning shark.
Wait for all that bogus old bull about competition. The mandarins will sell this project as a panacea for the consumer. Do not believe a word of it. Customers are about to be sold a pup, a third choice of predator. After last week’s gruesome fodder — figures served up by Irish Life and AIB — we could be brainwashed into believing that the future rests with the third force.
If you are a masochist you can always stick with your old persecutors, AIB and Bank of Ireland. Otherwise you may opt for the fresh, sparkling third force.
Even now in its pre-conception state, the embryo is beginning to look uncomfortably like its first and second siblings. Last week Irish Life and Permanent, a company peddling the third force idea, announced its results. They were woeful. Losses of €200m were revealed.
IL&P likes to distance itself from the two senior predators. It is not in Nama because it was not exposed to such huge property losses. It likes to portray itself as a kind of goody-two-shoes of the banking sector. IL&P wants us to forget that it was the outfit that helped Anglo to doctor its year-end books. Heads rolled, including the chief executive’s. A garda inquiry is now under way. Quite a humiliation.
Sadly they were never such brilliant bankers themselves. IL&P made boo-boos in Iceland to beat the band.
To be fair to the directors of Irish Life, they are not part of AIB or Bank of Ireland’s golden circle. Instead, they run their own little cabal.
And when heads roll at Irish Life, they roll just like they do at any other bank. Then the fallen fat cats are replaced in the same way as they are in the two bigger joints.
Last year when Denis Casey was forced to resign after the doctoring of Anglo’s books with the co-operation of Irish Life, the board sought a replacement.
No doubt the interview process for Casey’s successor was painstaking. Perhaps, like Bank of Ireland and AIB, they searched the world before making a selection. Within weeks they had found the ideal candidate. Enter the boy next door, Irish Life board member and head of life and pensions, Kevin Murphy.
Murphy, like his predecessor Denis Casey, is an Irish Life ‘lifer’. Just like the anointed successors Richie Boucher at Bank of Ireland and Colm Doherty at AIB, he was selected “from an exhaustive process of interviews of external and internal candidates” . Insiders win at AIB. Insiders win at Bank of Ireland. And insiders win at Irish Life. Insiders will win when the third force is up and running.
Murphy had been in Irish Life for 37 years. He was even there when the State owned it. So he must have picked up some bad habits along the way.
Good thinking by Irish Life to pick Kevin. Far less chance of the old guard cleaning out the Augean stables.
Alongside their deplorable figures on Wednesday, Irish Life slipped through the appointment of a new director. No, not a government- appointed director, but one of their own strokes of genius.
What an opportunity to introduce a fresh face, not a member of the banking cabal.
Recent appointments at Irish Life have not covered the board with glory. Ireland’s former financial regulator Liam O’Reilly was a bad choice in September 2008, but they chose Liam long before the world knew much about the antics of Ireland’s financial regulators.
Late last year they opted for Pat Ryan, a former treasurer and risk officer at AIB. Here I must declare an interest. I have a soft spot for Pat. When he was a gilt dealer at Allied Irish Banks and I was an apprentice stockbroker, he gave me my first ever decent order. I cannot forget his kindness; but suffice it to say that objectively an AIB risk officer does not look like an ideal selection in the week when AIB admitted €2.65bn of losses due to excessive risk in property and elsewhere.
On Tuesday, Irish Life appointed an unknown — Bernard Collins — to the board. At least he is not a banker. He even has 10 years experience at multinational Boston Scientific Corporation.
A new broom has landed on the board. Bully for Irish Life.
The press release mentions that Bernard has another gig.
Bernard is chairman of the troubled state-owned flop, the Voluntary Health Insurance.
Now why would the board of Irish Life want the chair of the bloated VHI to join them?
Obviously he has useful knowledge of the insurance market. That must be the reason. Besides, Irish Life may soon divest itself of its banking arm and concentrate on insurance. Bernard could be useful.
Did they advertise? How did they select him? Was there another “exhaustive process”?
Funnily enough, Bernard’s VHI board has another familiar sounding director. A woman by the name of Gillian Bowler is a long-time board member of the State’s health insurer. Gillian just happens to be chairman of Irish Life. So there we have it, a lovely cross- directorship coincidence. Bernard sits on Gillian’s Irish Life while Gillian sits on Bernard’s VHI.
Perhaps Gillian absented herself from the discussion when Bernard’s name came up for this obviously fiercely contested bauble?
Unlikely, as she herself chairs the key nomination committee.
Gentle Gillian seems to develop attachments to fellow directors. Less than three years ago when Irish Life chief executive David Went left office, he rapidly found himself on the VHI board, sitting beside his old pal — none other than Irish Life chairman Gillian. Now both of them sit happily at the Court of Bernard Collins at the VHI. Then last week, Bernard swans in to Irish Life . . .
Collins is no opponent of political appointments. A Corkman, he was parachuted on to the VHI board by his fellow Corkman, Fianna Fail’s Micheal Martin.
His membership of the IDA board adds to his semi-state portfolio. He was re-appointed to the IDA by the same Micheal in 2007 after initially being appointed by Mary Harney in 2002.
So Bernard straddles the semi-state and banking board circuits. Just like Gillian and David.
While small business is screaming for banking facilities, while mortgages are about to soar, while small shareholders are suffering irreparable losses, Irish Life is playing board games. The appointment of regulator O’Reilly did little to prevent Irish Life from a regulatory rout when the transfer of funds to Anglo was rumbled.
When vacancies in the board were created as a result of the Anglo debacle, they filled them with more insiders. Just like the other two senior sharks. The third force should cement the third cabal.