Proposals to cut risk at Ulster Bank 'not implemented'

THE ULSTER Bank executive who has secured an injunction against the bank said it chose not to introduce measures to reduce risk when he was head of business banking during the boom.

John McGrane, who is head of product and service sales at Ulster Bank corporate markets, obtained a court order late on Wednesday preventing the bank from taking steps to end his employment.

Mr McGrane of Marlborough Road, Donnybrook, Dublin 4, told the High Court that, as head of business and commercial banking from 2006 to 2008, he suggested “numerous risk-mitigating proposals which my employer chose not to implement”. These included “an early-warning unit to handle pre-impairment lending cases” and appropriate monitoring by the bank’s credit risk unit of adherence to approved lending terms.

The bank declined to comment as the case was before the courts.

Mr McGrane said the bank was going through “unprecedented change” resulting in “a difficult working environment”.

This had necessitated him to “challenge serious issues in the bank’s management of its relationship with its regulators and with its parent, RBS Group”, he said.

His dispute with the bank stems from its concern that it might not be able to certify him under the Central Bank’s fitness and probity tests for senior bank executives.

This is the first court action to arise as a result of the fitness and probity testing of bankers since it came into effect last December.

Mr McGrane was told by his superior David Thomas, managing director of Ulster Bank corporate markets, at a meeting on March 29th that the bank would not submit his fitness and probity papers to the Central Bank as he was part of management in 2008 at the time of the banking crash and because of his indebtedness.

He was asked to resign as a director of Ulster Bank Wealth, he said, and Mr Thomas threatened that he would “not be able to get another job in town” if the bank did not withdraw his fitness and probity papers. He said Mr Thomas told him: “We’ve decided not to go forward together.”

He said he had made it clear to the bank that his debts arose from “making an investment in my employer company and that had been funded by borrowings which were fully known to and authorised in writing by my employer”.

Mr McGrane told the court that he had been asked by the bank for a chronology of property purchases and “related loan findings”.

He warned that the decision not to submit his fitness and probity papers would “cause me irreparable harm and have a catastrophic effect on my reputation within the banking community”.

This would, in effect, disbar him from “serving in any meaningful banking role in future” and, given that he was 55, this would end his 37-year career as he was unlikely to get another job in banking, he said. He would also not be able to meet his loan commitments to Bank of Ireland and Ulster Bank.

The bank had sought a meeting with Mr Grane on Wednesday at 5pm to discuss his running of the business banking unit from 2005 to 2009, prompting his action.