Fingleton may have been spendthrift with Irish Nationwide’s big customers, but he was penny-pinchingly tight with staff

When Michael Fingleton stepped down as chief executive of Irish Nationwide at the end of April 2009, the small group that could loosely be described as his inner circle gathered around him in the seventh-floor boardroom of the building society’s Grand Parade head office to send him off.

It was awkward at first; the circumstances of his departure hardly merited a celebration.

He had succumbed to months of political pressure to leave over the controversial €1 million bonus he received in 2008, paid shortly after Irish Nationwide and the rest of the Irish banking system were saved by the Government with an unprecedented guarantee in the name of the Irish State. There were also heavy losses coming down the track, particularly on Irish Nationwide’s €9 billion commercial property loans, mostly on land and development.

Proceedings kicked off with Stan Purcell, Fingleton’s long-serving second-in-command, saying a few words; they were more factual than complimentary, telling the select gathering how Fingleton had run the building society since the early 1970s and wishing him the best for the future.

But as the beer, brandy and whiskey flowed for the few that remained on in the boardroom that evening, Fingleton started to warm up, answering questions about his best deal in banking, those who had influenced him and the famous people he had met.

The low-key send-off said a lot about Fingleton the man and the financial institution he ran. Even the few loyal building society staff that surrounded him that evening barely knew the man; this was the first time “Mr Fingleton” had opened up, even to them.

People who worked for “Fingers” remark on two things in the main. They describe how he had an impressive capacity to retain complex financial detail in his head and how he kept a tight rein on costs, giving him ultimate control over the building society, more so than any other chief executive at an Irish financial institution. Irish Nationwide’s cost-income ratio was the lowest in Irish banking and this was something he bragged about.

Fingleton may have been spendthrift with Irish Nationwide’s big customers, but he was penny-pinchingly tight with staff. For a long time he wouldn’t permit staff to park in the large space at the back of the Grand Parade head office. One former staff member believed he had wanted a park-and-ride facility for the Luas, which ran beside the building. Employees remember having to run out regularly to feed parking meters in the neighbouring streets.

Staff also recall Fingleton, who was among the last to leave the building every evening, walking the floors of the Grand Parade head office pulling phone-chargers out of the walls, switching off plug sockets and turning out lights, such was his obsession with keeping costs down.

Fingleton never liked revealing too much about Irish Nationwide, even internally. He was never comfortable with the list of the top 50 exposures (borrowers) being printed off every month as was necessary if the building society’s management was to keep track of loans.

While this approach may have been tough on staff, the building society’s big borrowers liked Fingleton’s hands-on role. Customers, mostly property developers, took comfort that the big man himself was signing off on their deals. It was even better when Irish Nationwide became a player in deals as Fingleton agreed to fund developments at 100 per cent of the loan-to-value if the building society could take up to half the future profits.

Fingleton’s successor, Gerry McGinn, remarked last year that there were only two rooms at Grand Parade where top clients could be met: the boardroom or Fingleton’s adjoining office. “One guy made the decisions here – the layout of the building reflects that,” he said.

As property markets turned, this tight control on costs and staff back-fired. There were just two managers – Belfast-based Gary McCollum and Fingleton’s son Michael jnr – in charge of UK commercial loans of €5 billion while another six managed about €4 billion of Irish property loans. Irish Nationwide struggled to cope under Fingleton.

Staff at Irish Bank Resolution Corporation, the former Anglo Irish Bank which is in charge of running down Irish Nationwide, are now moving back into the Grand Parade building following a refurbishment as IBRC closes offices to reduce costs. The move coincides with the approaching fourth-anniversary of the payment of Fingleton’s controversial €1 million bonus which still has to be repaid as he promised.

In the background, the Central Bank is quietly building a case against Fingleton over the reckless lending by the building society during his tenure. Regulatory officials have met everyone from former low-ranking staff to some of the big developers that Fingleton bankrolled. The investigation must get inside Fingleton’s inner circle to understand how Irish Nationwide did its business if it is to hold him to account for Irish Nationwide’s €5.4 billion cost to the State.

Finding that evidence in a circle of one will be the difficult part.