AIB AND the former Anglo Irish Bank may be selling their loan books for less than they should compared to the value for money being achieved by Bank of Ireland, the Dáil has heard.
Fine Gael Wicklow TD Billy Timmins said the motivation of the two almost wholly State-owned banks appeared to be to sell the loans off regardless of value for money – to get rid of them.
In comparison, Bank of Ireland, in which the State has just a 15 per cent shareholding, “is undertaking this process in the correct manner and it is achieving value for money”.
Mr Timmins claimed banks and other institutions buying the loan books “have buyers lined up and they sell them on at a higher price the next day”. He called for the Minister for Finance to undertake a comparative analysis of the percentage Anglo and AIB were achieving on their sales compared to Bank of Ireland. He asked if the Financial Regulator could track the resale of the loan books.
His understanding on the basis of confidential information “is that bank loan books are being undersold”. He asked if a bonus, commission or merit system was in place for staff moving loan books on.
The Wicklow TD acknowledged it was a “subjective argument” but “our country is being ravaged by wolves that are treating us like a carcass”.
“It is happening in front of our eyes, and the banks are so happy to move these loan books on that we do not realise what is happening.”
He also claimed the same was occurring with the National Asset Management Agency (Nama) and its property portfolio.
Traders in the US are saying “let’s move to Ireland. There’s a killing to be had there”, he told the Dáil.
Minister of State for Finance Brian Hayes said it was Nama’s responsibility to “ascertain the best possible market price for assets under its jurisdiction”. He would raise the issue with the Minister for Finance, and see to it a statement would be made in the Dáil on the issue.
Mr Hayes said “the fundamental question is whether undervalued loan books are being sold on” but it was an issue of “what constitutes market value at present”.
The Minister said “the fundamental issue for banks in full private ownership is their responsibility to their shareholders”.
He said that with the two banks effectively in public ownership there were “public interest directors whose responsibility it is to safeguard the interests of the taxpayer”.
Mr Timmins asked if there was “any way to analyse the sale of Nama properties” to check if value for money was being achieved.
“My concern is the motivation is also to move the properties on and value for money is not being achieved. There is evidence that this is the case.”
