IRISH NATIONWIDE has suspended the head of its UK operations as a result of lending practices uncovered by the new management team at the lender.
Gary McCollum, who was based in the building society’s Belfast office, oversaw Irish Nationwide’s €4.4 billion UK loan book with Michael Fingleton jnr, the son of the building society’s former chief executive, who worked in the lender’s London office.
Mr Fingleton, who resigned as chief executive last year, worked closely with the two executives, growing the London loan book, particularly in the development and property investment sectors.
A spokesman for the building society declined to comment on the suspension of the manager. Mr McCollum could not be reached for comment yesterday. Mr Fingleton jnr continues to work with the society in London.
The new senior management team at Irish Nationwide, led by chief executive Gerry McGinn, were understood to have been surprised that just two managers oversaw such a large loan book.
UK loans represent 42 per cent of Irish Nationwide’s overall loan book. Mr McCollum was involved in managing loans on a number of high-profile projects in London.
He was involved in providing a €15 million loan for redevelopment work at Craven Cottage, the home of Fulham football club in London, which is owned by Mohamed Al Fayed.
Mr McCollum managed Irish Nationwide’s Belfast office when the building society set a rental record in the city in 2008, leasing space in the landmark 10-storey Centrepoint building opposite BBC Broadcasting House.
Accountants Ernst & Young have been carrying out a review of Irish Nationwide’s UK loan book in recent weeks as the building society prepares its financial statements for 2009 and assesses the society’s capital requirement.
Irish Nationwide has bolstered the management team within its UK division with credit analysts over recent months to help assess the full scale of rising loan losses.
The building society has said that it would need up to €2 billion following the transfer of €8.3 billion of loans to the National Asset Management Agency (Nama).
Irish Nationwide and EBS are engaged in merger discussions and have secured approval from members to cede special investment shares to the Government to facilitate an injection of State capital to keep them in business.
In a separate development, the Irish Bank Officials Association (IBOA) briefed members at Irish Nationwide in a telephone conference call yesterday on its talks with management concerning assurances on job security.
The IBOA wrote to Mr McGinn earlier this month expressing the union’s disappointment at the lack of progress in the discussions and concerns about job losses arising from the merger with the EBS.
