Regulator paid €7.5m for bailout advice

THE FINANCIAL Regulator paid €7.5 million in fees to the “big four” accountancy firms for advice on the bank guarantee scheme and “related supervisory duties”.

The largest amount was paid to PricewaterhouseCoopers (PwC) which earned €5.4 million, the majority of which was paid between September 2008, when the Government guarantee was introduced, and January 2009.

KPMG received the next largest amount. It was paid €1.5 million for seconding staff to the regulator during March and April 2009.

Included in this sum was €265,000 paid by the regulator for assistance on its investigation into Anglo Irish Bank and potential “administrative sanction procedures” against the bank.

These fees were paid for the secondment of KPMG staff from April 9th, 2009, to July 27th, 2009.

Deloitte received fees of €412,000 from the regulator, while Ernst and Young was paid €218,000.

The figures were contained in correspondence sent to the Public Accounts Committee on December 23rd and published by the committee yesterday.

The regulator deleted from the correspondence the names of the individuals at the accountancy firms who carried out the work.

PwC received €290,000 in September 2009 for carrying out a review of provisions set aside by Irish Nationwide Building Society to cover bad debts. The firm received €274,000 the following month for a review of the bad loan levels at the Educational Building Society at June 30th, 2009.

PwC received two further payments of €562,000 and €584,000 in March 2010 in respect of “due diligence” it carried out.

The accountancy firm sent in an invoice for two payments of €350,000 in November 2008 for work carried out on AIB and Bank of Ireland. It sought payment of €300,000 for work on Anglo, €200,000 on Irish Nationwide, €150,000 on Irish Life and Permanent, and €120,000 on the Educational Building Society.

PwC also charged €691,000 for property valuations carried out by estate agents Jones Lang LaSalle in January 2009.

The accountancy firm charged the regulator €28,000 on another invoice for just over 11 days’ work – or €2,500 a day – commissioned in February 2009.

Deloitte charged €116,000 in February 2009 for services relating to the regulator’s review of directors’ loans in five banks covered by the guarantee.

The regulator said it took appropriate measures to ensure no conflicts of interest arose with the appointment of accountancy firms which had previously carried out work with the banks.