Anglo Irish Bank - Controversy of Business Practices & Loans

Controversy of Business Practices & Loans

On 4 April 2010, the Times described the lending practices at Anglo Irish Bank and how these led to the nationalisation of the bank. The article quotes the new CEO, Mike Aynsley: "hubris played a very, very big part." In many deals, Anglo Irish Bank would lend to wealthy individuals to further their equity participation. According to the CEO of Ireland's the National Asset Management Agency (NAMA), loan-to-value on deals was as high as 100%. As a result the bank was totally exposed to any decline in value. In many cases, Anglo took personal guarantees as security. However, NAMA attaches no value to these personal guarantees.

Of the €36.5 billion of loans not being transferred to NAMA, Anglo Irish Bank has taken a provision of €4.9 billion. The article in the Times notes that Anglo Irish Bank has large exposures to entrepreneurs such as Seán Quinn of Quinn Group and Barry O’Callaghan, of EMPG. In both cases, the bank's security was limited and largely on the men's shares in businesses. The provision of €4.9 billion compares with impaired loans of €9.5 billion at the end of December 2009.

Read more about this topic:  Anglo Irish Bank

Other articles related to "loans":

Anglo Irish Bank - Controversy of Business Practices & Loans - Loans To Sean Quinn & The Quinn Group
... family is estimated to have €2.8 billion of loans from Anglo Irish Bank and the QUINN group has an additional €1.2 billion of loans ... Given the magnitude of the loans to Anglo Irish Bank the company was reported to be considering a €700 million financial rescue of the QUINN group ...

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