Court hears of Anglo Irish Bank ‘back-to-back’ plan

A global investment banking company rejected an invitation from Anglo Irish Bank to take part in a "back-to-back" transaction to enhance the bank's year-end corporate deposit figure, Dublin Circuit Criminal Court has heard.

The trial of four senior bankers accused of conspiring to mislead investors heard evidence that in September 2008 a bonds portfolio manager from Anglo put the option of an overnight transfer to Credit Suisse.

In a phone-call Peter Geissel, who was senior portfolio manager for Anglo from 2006, told Jerome Henry from Credit Suisse: "We're basically looking to enhance the level of our corporate deposits for year end. We're looking at a straight corporate deposit from one of your entities or else a 'back to back'."

Mr Geissel went on to explain that Anglo would places funds with a Credit Suisse banking entity and Anglo would then receive a deposit from a corporate entity.

Mr Geissel told Mr Henry that the deposit had to come from a non-bank entity, “something like CSAM (Credit Suisse Asset Management)” or “some other financial vehicles”.

When Mr Henry raised the issue of “net risk” Mr Geissel said: “We could probably do it on basis that there is a broader set-off arrangement between the three parties.” A “set off” is where one transaction cancels out another, the trial was told.

Asked what the term of the deposit would be, Mr Geissel told Mr Henry the bank would be happy to do it very “short”, adding: “if necessary overnight”.

Mr Geissel told Úna Ní Raifeartaigh SC, prosecuting, that Mr Henry said he would explore the idea, and that later that day he said they weren’t prepared to do such a deal.

Peter Fitzpatrick (63), former director of finance at Irish Life and Permanent (ILP), ILP's former chief executive Denis Casey (56), Anglo's former head of finance, Willie McAteer (65) and John Bowe (52), who had been Anglo's head of capital markets are accused of conspiring to mislead investors by using interbank loans to make Anglo appear €7.2 billion more valuable than it was. They have pleaded not guilty.

The trial continues before Judge Martin Nolan.