Banking Inquiry to hear from Anglo and Irish Life & Permanent/Permanent TSB witnesses

02/09/2015

The Oireachtas Banking Inquiry will continue public hearings tomorrow, Thursday, 3rd September when it will meet with Peter Fitzgerald, Gary McGann, Matt Moran, David Went and David Gantly.

The schedule for tomorrow is:

Session A: 9 a.m.
Peter Fitzgerald, former Director of Corporate & Retail Treasury, Anglo Irish Bank;

Session B: 11 a.m.
Gary McGann, former Non-Executive Director, Anglo Irish Bank;

Session C: 1 p.m.
Matt Moran, former Chief Financial Officer, Anglo Irish Bank;

Session D: 4 p.m.
David Went, former Group Chief Executive, Irish Life and Permanent/Permanent TSB;

Session E: 6 p.m.
David Gantly, former Head of Group Treasury, Irish Life and Permanent/Permanent TSB.

Chairman Ciaran Lynch TD said: “The focus of the inquiry tomorrow morning is on Anglo Irish Bank. At our first session we will hear from Peter Fitzgerald, former Director of Corporate & Retail Treasury, Anglo Irish Bank. Peter Fitzgerald joined Anglo Irish Bank in 1998. While working in the Treasury Division he developed the retail savings franchise in Ireland and the UK. He was Director of Corporate & Retail Treasury from 2006 to 2008. Mr Fitzgerald now works as an advisor to start-up and SME companies in Ireland in the areas of strategic planning, corporate communications and business development.

Mr Fitzgerald will be asked to give evidence on a number of lines of inquiry including: the appropriateness of credit policies, delegated authorities and exception management; the adequacy of the valuation policies and assumptions to accurately assess loan security; the independence of the professional advisors in valuing property assets; the adequacy of internal controls over perfection of security and policy exceptions; the effectiveness of the oversight of the prevailing risk culture; the liquidity versus solvency debate; the appropriateness of the bank guarantee decision; and the appropriateness of the regulatory regime .

At our second session tomorrow, we will hear from Gary McGann, former Non-Executive Director at Anglo. Mr McGann was a non-Executive Director of Anglo from 2004 to 2009. He is the former Group Chief Executive Officer of the Smurfit Kappa Group. Previously, he was Group CEO of Aer Lingus and CEO of Gilbeys of Ireland. Currently he is Chairman of Aon Ireland and Paddy Power plc.

Among the issues the Committee will address with Mr McGann are: the composition, skills and experience of the board and board subcommittees; the quality of the business model setting process; the adequacy of board oversight over internal controls to ensure risk is properly identified, managed and monitored; the appropriateness of property-related lending strategies and risk appetite; the appropriateness of credit policies, delegated authorities and exception management; the adequacy of the incentive and remuneration arrangements to promote sound risk governance; the impact of shareholder or lending relationships in promoting independent challenge by the board and/or executives; the effectiveness of internal audit oversight and communication of issues related to governance, property-related lending strategies and risks, and funding and liquidity risks; the effectiveness of the oversight of the prevailing risk culture; the impact of prevailing accounting standards in recognising risks; the effectiveness of the external audit processes to identify and report to the board and management, any concerns related to significant risk exposures, including property, funding and liquidity; the appropriateness of the regulatory regime; the effectiveness and appropriateness of the supervision policy and powers; the nature and appropriateness of the relationship between the Central Bank including the Financial Regulator, the Department of Finance and the banking institutions; and the appropriateness of the relationships between Government, the Oireachtas, the banking sector and the property sector.

At our final Anglo Irish Bank session tomorrow, we will hear from Matt Moran, former Chief Financial Officer at Anglo Irish Bank. Matt Moran was Chief Financial Officer at Anglo from 2004 to 2008 and Finance Director from 2009 to 2011. He is currently a partner in the Corporate Finance division of PWC Luxembourg.

Lines of inquiry to be addressed with Mr Moran include: the integrity of financial reporting; the quality of the business model setting process; the appropriateness of property-related lending strategies and risk appetite; an analysis of risk concentrations in the base, the adverse economic scenarios and the impact on capital structure; the appropriateness of funding sources including the mix, maturity profile and cost; an analysis of liquidity risks under adverse scenarios; the interest rate risk appetite setting and monitoring; the capital structure and loss absorption capacity; the adequacy of the valuation policies and assumptions to accurately assess loan security; the effectiveness of internal audit oversight and communication of issues related to governance, property-related lending strategies and risks, and funding and liquidity risks; the effectiveness of the oversight of the prevailing risk culture; the impact of prevailing accounting standards in recognising risks; and the effectiveness of the external audit processes to identify and report to the board and management, any concerns related to significant risk exposures, including property, funding and liquidity.

Mr Moran will also be questioned on the liquidity versus solvency debate; the appropriateness of the bank guarantee decision; the decision to recapitalise Anglo, AIB, Bank of Ireland, EBS, Permanent TSB and the alternatives available and/or considered; the appropriateness of the regulatory regime; the effectiveness and appropriateness of the supervision policy and powers; and the nature and appropriateness of the relationship between the Central Bank including the Financial Regulator, the Department of Finance and the banking institutions

Later in the afternoon, the focus of the inquiry will be on Irish life and Permanent/Permanent TSB. At this session we will hear from David Went, former Group Chief Executive at ILP/PTSB. David Went was appointed Managing Director of Irish Life Assurance plc, Dublin in 1998 and Group Chief Executive of Irish Life & Permanent plc in 2000. Mr Went retired in May 2007. He spent most of his career with the NatWest Group where he was Chief Executive of the Ulster Bank Group from 1988 to 1994 and Chief Executive of Coutts Group from 1994 to 1997.

Mr Went will be questioned on: the composition, skills and experience of the board and board subcommittees; the quality of the business model setting process; the adequacy of board oversight over internal controls to ensure risk is properly identified, managed and monitored; the appropriateness of property-related lending strategies and risk appetite; the appropriateness of credit policies, delegated authorities and exception management; an analysis of risk concentrations in the base, the adverse economic scenarios and the impact on capital structure; the adequacy of the incentive and remuneration arrangements to promote sound risk governance; the impact of shareholder or lending relationships in promoting independent challenge by the board and/or executives; the appropriateness of the regulatory regime; the effectiveness and appropriateness of the supervision policy and powers; the aature and appropriateness of the relationship between the Central Bank including the Financial Regulator, the Department of Finance and the banking institutions; and the appropriateness of the relationships between Government, the Oireachtas, the banking sector and the property sector.

We will continue our focus on Irish life and Permanent/Permanent TSB at our final session tomorrow afternoon. At this session we will hear from David Gantly, former Head of Group Treasury, ILP/PTSB. David Gantly joined the then Irish Permanent Building Society In 1994 as Chief Dealer in their Treasury department. He was appointed Group Treasurer of Irish Life and Permanent in 2000 and held that post until he left the group in early 2009.”

Mr Went will be asked to give evidence on a number of lines of inquiry, including: the appropriateness, management and control of Client Relationship activities; an analysis of risk concentrations in the base, the adverse economic scenarios and the impact on capital structure; the appropriateness of funding sources including the mix, maturity profile and cost; an analysis of liquidity risks under adverse scenarios; the interest rate risk appetite setting and monitoring; the appropriateness of investment of liquid assets in government and/or other securities; the capital structure and loss absorption capacity; the adequacy of the incentive and remuneration arrangements to promote sound risk governance; the impact of prevailing accounting standards in recognising risks; and the effectiveness of the external audit processes to identify and report to the board and management, any concerns related to significant risk exposures, including property, funding and liquidity.

Other area of interest are: the liquidity versus solvency debate; the appropriateness of the bank guarantee decision; the effectiveness of reviews of banks’ loan books and capital adequacy; the establishment, operation and effectiveness of NAMA; the adequacy of the assessment and communication of both solvency and liquidity risks in the banking institutions and sector; and the nature and appropriateness of the relationship between the Central Bank including the Financial Regulator, the Department of Finance and the banking institutions.”

Further information on the Oireachtas Banking Inquiry can be accessed on this website. Full committee proceedings will be webcast live on this website while Oireachtas TV will broadcast proceedings from 9am.

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Committee Membership

Deputies

Ciarán Lynch (Chairman)
Pearse Doherty
Joe Higgins
Michael McGrath
Eoghan Murphy
Kieran O’Donnell
John Paul Phelan

Senators

Sean D Barrett
Michael D’Arcy
Marc MacSharry
Susan O’Keeffe