In almost four hours of evidence yesterday, Fingers revealed that he examined his pension scheme around 1992 and discovered that he would get a better return by putting the money on deposit with Irish Nationwide Building Society.
He persuaded the company to allow him manage the fund himself, turning some €3 million in contributions from Irish Nationwide into a €30 million pot of gold by the time of his retirement.
Fingleton declined to say how much he earns each year from his pension fund and the committee was barred from asking about the €1 million bonus he received from the building society for 2008, when the Irish banking market collapsed and the government was forced to introduce a blanket guarantee.
Nationalised
Irish Nationwide was subsequently nationalised, receiving a €5.4 billion bailout, before being folded into
Irish Bank Resolution Corporation
and closed.
He gave a robust defence of his 38-year stewardship of the society.
Fingleton told the committee how foreign banks had disrupted the market here, forcing local players to trim their margins to unrealistic levels.
He also reminded the committee that Irish Nationwide did not issue 100 per cent mortgages or trackers, and pulled in its horns on commercial lending in late 2007 due to concerns about the market here.
Its commercial loan book turned over every three years and it was well funded from deposits and wholesale accounts.
His “regret” at taxpayers having to bail out the business and the consequences that flowed for staff, shareholders and customers could best be described as half-hearted.
Fingleton doesn’t regret any decisions that he took prior to the crash, but does regret that the commercial loan book was “too large” at the time of the crash and the consequences that flowed.
His thesis is that if they’d had just one more year, they would have been able to reduce the commercial loan book from €8.7 billion to about €5 billion and swerved the crash.
Fingleton’s evidence yesterday was a carefully crafted exercise in reputation management, having avoided the spotlight for six years.
Fiefdom
He wanted to debunk some popular myths – that he ran Irish Nationwide as a fiefdom and gave loans to celebrities without them meeting the “normal criteria”.
Fingleton believes that the building society was solvent on the night of the bank guarantee and had sufficient cash on hand to weather the early storm.
He disputes the severe haircuts applied by the National Asset Management Agency to Irish Nationwide's property loans, which led to the bailout.
“Having built up the society in a competitive, innovative and cost-efficient manner over the years from a business with €20,000 profit and five employees with one branch office to almost €400 million profit and 455 employees with 50 full branch offices, it was an absolute shock and bitter disappointment to me that the society succumbed to such a cataclysmic financial crisis, a one-in-100-year event which caused such huge damage to every element of the nation, both corporate and personal,” he said.
Fingleton told the committee how he continues to “pay the price, personally, as a result” of the crash.
He feels “wronged” by much that has been said and written about his time at the helm.
Given the cost to taxpayers of Irish Nationwide’s collapse and Fingleton’s handsome remuneration over the years, public sympathy will be in short supply.
