Executive suing Ulster Bank says loans are in order

THE SENIOR Ulster Bank executive, who secured a High Court order last week blocking the bank from dismissing him, claims that the lender’s chief executive Jim Brown had “noted” late last year that his loans were operating “within approved terms”.

John McGrane, the head of product and service sales in Ulster Bank Corporate Markets, sued the bank after he was told it would not be submitting his papers to the Central Bank for approval under fitness and probity rules due to his debts arising from purchases of property and shares in the bank’s parent Royal Bank of Scotland (RBS).

The bank asked him to resign as chairman and director of Ulster Bank Wealth because he was also part of the management team in 2008 at the time of banking crash and it had “serious reservations” about his past performance.

Mr McGrane was head of business and commercial banking between 2006 and 2008. He is contesting the bank’s decision not to submit fitness and probity papers, saying that it would prevent him getting another job in banking and in effect end his 37-year career.

Mr McGrane, a prominent figure in business circles and a vice-president of the Dublin Chamber of Commerce, told the court in an affidavit that he met Mr Brown, head of group legal Rachel Curran and Judith Crawford from human resources on November 30th.

According to his affidavit, he said that, at the meeting, Mr Brown “noted that my financial borrowing facilities were all operating within approved terms and were being serviced satisfactorily”.

Ms Crawford asked him after the meeting to “set out the chronology of house purchases and related loan findings” which he provided on December 3rd, he said. There were no further requests for information, he said.

Mr Brown and Ms Crawford were assessing Mr McGrane’s fitness and probity application to the Central Bank, which had to be submitted by March 31st.

His role as a director of Ulster Bank Wealth was a “pre-approved controlled function” requiring sign-off.

Mr McGrane was told by David Thomas, managing director of Ulster Bank Corporate Markets, at a meeting on March 29th that the bank wanted him to resign as chairman and as a director of Ulster Bank Wealth. Mr Thomas said, “We’ve decided not to go forward together”, the affidavit says.

Mr McGrane also warned that failing to submit fitness and probity papers would affect his ability to meet loan commitments with Bank of Ireland and Ulster Bank.

He said, in his affidavit, that the bank had always been fully aware of his loans, given that the greater share of his debts were with Ulster Bank and he made his employers aware of his loans at Bank of Ireland since their inception in 2006.

Ulster Bank was given updates on his borrowings on numerous occasions, he said, and no issue had ever arisen with his loans.

He was told in May 2006 by the then chief executive of Ulster Bank Corporate Markets Robert Gallagher that his decision to make a “substantial investment” in RBS shares complied with “staff share dealing rules”, he said.

Ulster Bank is undergoing a major restructuring as it seeks a further 950 job cuts.

Mr McGrane said the bank was operating in a period of “substantial unprecedented change” and that this had led him to challenge serious issues over the bank’s relationship with its regulators and its parent, RBS.

Notwithstanding this, the bank indicated that he was part of the future management structure in a private document circulated in the bank last month, he said.

Mr McGrane said Ulster Bank’s chief risk officer Stephen Bell had also expressed serious concerns to executives about the risk to the bank of losing experienced senior executives through the changes.