SENIOR BANKERS were “likely to have been dishonest or disingenuous at least” in presenting the financial health of their institutions during the banking crisis, the head of the Department of Finance told a Dáil committee.

The department’s secretary general, Kevin Cardiff, told the Public Accounts Committee that Anglo was “extremely disingenuous” in presentations it made about the quality of its loans and its ability to raise capital in the months after the September 2008 guarantee.

Anglo made a presentation to the department on September 18th – 12 days before the guarantee – claiming it was in “old-fashioned banking” and had “no requirement for external equity capital”.

Such claims were never given “any real credit”, said Mr Cardiff.

The department had not been taken in by bank’s “overly optimistic” outlook and it had been sceptical about the bank’s financial health before the true scale of its loan losses became apparent.

Mr Cardiff said that Anglo was trying to minimise the real extent of the potential losses in the months following the guarantee, after the property market had started its “nosedive”.

“Their communications may well have been disingenuous, extremely so in the case of some we received, but they probably thought that they could use their skills and flair to get through the problems,” he said.

It took a while “for reality to dawn” in other institutions even after the peak of the crisis, he said, as they did not accept they needed capital until much later.

“In some cases the people were likely to have been dishonest or disingenuous at least,” he said.

“In other cases, people believed in the line they were producing and maybe there was some mix of self-deception and attempting to put a bright spin for us and some disingenuousness or dishonesty in some quarters on some issues.”

Anglo told the department that 0.5 per cent of the bank’s loan book at March 2008 was impaired, according to documents released to the committee last week. Mr Cardiff said this was one case where the bank mixed “disingenuousness with self-delusion”.

Anglo, since being nationalised, has written off about 20 per cent of its loans, forcing the Government to inject up to €22 billion.

Labour’s Pat Rabbitte said the presentation “must take the biscuit for chutzpah, sheer hard neck and lying”, describing it as “outrageous”. “It wasn’t the only outrageous thing they said or did,” said Mr Cardiff. Mr Rabbitte asked Mr Cardiff if it was not an offence in law to mislead the department. Attempting to mislead the department was “a sport in some places”, he said.

Mr Cardiff said a level of self-delusion was possible because of the capital they held to protect against some scale of losses. “I am honestly not going to say, who was lying to me and who was not for fear I might get it wrong,” he said. “There was a lot of lying to themselves and at least persuading themselves that things were better than they were.”