SEÁN FitzPATRICK/ Seán FitzPatrick, chairman of Anglo Irish Bank, today(December 18th 2008):A statement from the board of directors of Anglo Irish Bank Corporation plc announces that Mr Seán FitzPatrick has tendered his resignation as chairman with immediate effect. The board has accepted his resignation with regret. The board also announces Mr Lar Bradshaw, a non-executive director, has tendered his resignation. The board has accepted Mr Bradshaw's resignation with regret.
Mr Donal O'Connor was nominated and appointed chairman, in succession to Seán FitzPatrick at a board meeting this afternoon. He joined the board as a non-executive director in June 2008. He was senior partner of PWC for 12 years until June 2007, and a member of the global board of PWC for six years to September 2008.
Mr FitzPatrick's decision to resign is based on the fact that, over a period of eight years to 2007, he temporarily transferred loans with Anglo Irish Bank to another bank prior to the group's year end. This transfer of loans did not breach banking or legal regulations. It was, however, inappropriate from a transparency point of view.
At September 30th, 2008, the loans to Seán FitzPatrick totalled €87 million. The total for directors' loans at that date was €150 million. Mr Bradshaw's decision is based on the fact that a loan, which he held jointly with Mr FitzPatrick, was temporarily transferred to another bank prior to year end.
While Mr Bradshaw was unaware that this transfer took place, he believes that it is in the bank's best interest that he should resign.
The board has advised the Financial Regulator and the Department of Finance of the issue and of Mr FitzPatrick's and Mr Bradshaw's decisions.
All of the other directors have confirmed that they have not engaged in this or in any other inappropriate action in relation to their loans. All directors' loans are agreed on normal commercial terms and conditions.
The board of directors has decided to initiate a formal review of governance including policy and practice relating to the directors loans. This review will be carried out using independent expertise.
It is important to state that the annual reports of the bank for each of the years in question represent a true and fair view of the bank. The disclosures in each of the annual reports were in full compliance with Companies Acts requirements.
MINISTER FOR FINANCE
The Minister for Finance, Mr Brian Lenihan, today [December 18th] welcomed the appointment of Mr Donal O'Connor as the new chairman of Anglo-Irish Bank to replace Mr Seán FitzPatrick. The Minister noted that this appointment was made following consultation with him.
The Minister said that this change would not interrupt the substantial progress which has been made with Anglo Irish Bank in relation to the recapitalisation programme he announced last Sunday (December 14th, 2008) and reiterated his commitment to underwrite the capital needs of Anglo Irish Bank on appropriate terms and to ensure its long-term strength and viability as a bank of systemic importance in Ireland.
The Minister expressed his disappointment at the circumstances surrounding the resignation of Mr Seán FitzPatrick as chairman but believes that strong corporate governance must be upheld by all financial institutions in the Irish financial system.
He welcomes the board's decision to conduct a review in this regard. He understands that the financial regulator is already engaged in discussions with the institution on these issues.
The Minister said that Mr O'Connor, who has a substantial and impressive commercial track record, seems a natural choice to lead this financial institution in what is a challenging period for all financial institutions.
The Minister said that he looks forward to progressing discussions with Mr O'Connor and his board in relation to Anglo-Irish's involvement in the State's recapitalisation programme. He noted that these discussion are already far advanced and that he expects that the details of these discussion can be announced very shortly.
Anglo Irish Bank remains covered by the Irish Government guarantee, so its depositors and creditors are assured of the security of their funds.
The Minister restated that the Government will ensure financial stability within Ireland and will continue to take all necessary measures to ensure that systemically relevant institutions, such as Anglo Irish Bank, remain sound and viable.
The Minister noted that he is happy with the significant progress made this week with a number of institutions arising from the announcement by the Government of its recapitalisation programme of up to €10 billion. The Minister expects to be in a position to make a comprehensive announcement in this regard in January.
FINANCIAL REGULATOR
The Financial Regulator became aware, following an inspection earlier this year, of matters surrounding loans from Anglo Irish Bank to Seán FitzPatrick.
While it does not appear that anything illegal took place in relation to these loans, the Financial Regulator was of the view that the practices surrounding these loans were not appropriate.
As a result we continued to monitor and investigate this and as part of this process, we advised Anglo Irish Bank to ensure that these loans are reported in the annual accounts for 2008.
While these matters remain under investigation, the Financial Regulator was informed today by the board of Anglo Irish of the resignation of Seán FitzPatrick as chairman and Mr Lar Bradshaw as director. It has welcomed the appointment of Mr Donal O'Connor as the new chairman.
