IRISH NATIONWIDE has narrowed its search for a new chief executive to replace Michael Fingleton to five or six candidates and plans to make an offer by the end of this month, according to its chairman Danny Kitchen.
Speaking to reporters ahead of Irish Nationwide’s annual meeting yesterday, Mr Kitchen said the society would wait until the new chief executive started before appointing two more senior posts at the lender – a chief risk officer and head of loans administration.
He said he didn’t think there was anything wrong with a dominant personality like Michael Fingleton running the society for so long but that there was “a need to have a structure underneath him”.
He told members later at the acrimonious, four-hour meeting that they might have “mixed feelings” towards Mr Fingleton but that he brought Irish Nationwide “from a minnow to the substantial financial institution it is today”.
Mr Kitchen, who is acting chief executive, said that the building society had raised enough money to repay investors €1 billion in funding that falls due on Monday.
Irish Nationwide has funding of €2.2 billion to renew this year and a further €2.5 billion next year.
He said that the society would take up the Government’s offer to guarantee sales of one-off bonds of up to five years if it was offered.
Mr Kitchen said Irish Nationwide had lost 20 per cent of its UK sterling deposits due to the negative economic sentiment in Britain towards Ireland, down from £1.7 billion at the end of 2008.
Mr Kitchen disclosed for the first time that the building society had about €4 billion in development loans, equal to half its €8 billion commercial property loans.
He said that the society aimed to change from being “a property bank” and go back to basics by shrinking commercial loans and focusing more on home loans.
Mr Kitchen said the 100 largest customers accounted for 60 per cent of the commercial loans, which meant it could provide for bad loans “in a much more specific way” than other institutions.
He said that it did not make “an awful lot of sense” for the Government to buy good property loans under the Nama bad bank plan, particularly if the institutions are being asked to take a loss on them.
Mr Kitchen also said he would review the policies on mortgage arrears, penalty charges and lawsuits against customers in default.
Brendan Burgess, a long-time critic of the society, called for vice-chairman Terry Cooney to resign after it emerged he was warned in early 2008 about the significant “reputational risk” of the controversial loans to Anglo Irish Bank chairman Sean FitzPatrick.
Mr Burgess called for director Stan Purcell to consider his position after Mr Purcell said he only learned of the warning from the auditors, KPMG, later last year.
Members voted to re-appoint the auditors and increase the size of the board from eight to 10. Mr Kitchen said he wanted three executive directors on the board.
He said the building society was not in discussions about a merger or the creation of a super-mutual.
The society was “worth a lot less than it was back in 2007”, he said, and that it would not be purchased “for the foreseeable future”.
