FORMER ANGLO Irish Bank chairman Seán FitzPatrick proposed a merger of the bank and Irish Nationwide Building Society at a meeting with Minister for Finance Brian Lenihan last September before the Government’s bank guarantee was introduced.
Mr Lenihan told the Oireachtas Committee on Finance and the Public Service that Mr FitzPatrick requested a meeting with the Minister and his department’s secretary general, David Doyle. The Minister said it was his first meeting with Mr FitzPatrick.
He said that at the meeting Mr FitzPatrick outlined “a plan he had to amalgamate or consolidate Anglo Irish Bank with Irish Nationwide Building Society and asked if the State would be interested in supporting such a move”.
Mr Lenihan indicated to Mr FitzPatrick that he did not see the plan “as a very realistic proposal” as all the banks were coming under considerable stress at the time.
Mr Lenihan said Mr FitzPatrick felt “some sort of union” between the two institutions could “stabilise” the banking sector and this would require some State support.
The meeting was held as Anglo was losing billions of euro in deposits and struggling to maintain its funding. These factors, unknown publicly at the time, would have affected Anglo’s ability to execute such a union on its own.
Mr Lenihan rejected Mr FitzPatrick’s proposal. A spokesman for the Minister said the meeting took place on September 18th.
Anglo’s interest in Irish Nationwide emerged publicly in media reports the following day.
Asked last December about reports of the proposed union with Irish Nationwide, Anglo’s then chief executive, David Drumm, told reporters: “Some conversations were had and that certainly got into the public arena. It didn’t go anywhere.”
Mr FitzPatrick resigned from Anglo in December after it emerged he had hidden tens of millions of euro in loans from Anglo over eight years using borrowings from Irish Nationwide.
Mr Lenihan said Irish Nationwide was “well funded” on September 29th to 30th, the night the bank guarantee was agreed.
