Michael Fingleton wants payback, having built the society over 30 years, writes Colm Keena.

The man who built Irish Nationwide into a successful building society and who has run it like an independent fiefdom for the past 30 years, wants to get his return for the wealth he has created.

The path Michael Fingleton has identified is the sale of the building society to a bank, presumably with a large payment for himself as part of the transaction, but the question being asked is who would want to buy?

"People would be less interested now than they would have been five years ago," says one source. "Perhaps we have seen the best days of the Irish mortgage market."

Mr Fingleton is known to be obsessive about keeping costs down and the society prides itself on its unparalleled costs-to-income ratio. Some sources say an issue in any sale could be the level of investment that a new owner might have to make in basic systems.

Furthermore, sources say, there is the question of the reputation of the society or the value of its brand, which has been tarnished by concerns about its corporate governance and by allegations concerning the rates it charges and its treatment of its customers.

The society's board, for its part, says it is an attractive package, especially for foreign banks seeking to enter the Irish market. With 50 branches and 44 active agencies, and its mix of a loan book and commercial investments, the society will generate interest, the board believes. The membership will have to approve any deal, as will the Central Bank. The board believes the society is too small for going public.

Meanwhile, Mr Fingleton will continue to run Irish Nationwide as if it is his personal fiefdom. The society is famed for having senior executives join only to leave shortly thereafter, and this is generally believed to be because they grow frustrated at their lack of authority.

As a result, there is no obvious successor sitting in the society's boardroom. An obvious way for Mr Fingleton to get his reward from Irish Nationwide is by way of salary.

His pay package was revealed to yesterday's annual general meeting and some members were shocked by the €835,000 he got last year in salary, benefits and bonuses.

However chairman Dr Michael Walsh said the money was deserved given the way Mr Fingleton had developed the society. In fact, he said, he believed the managing director deserved more. The chief executive of AIB, the State's largest bank, earned €940,000 last year.

A native of Tubbercurry, Co Sligo, and the son of a garda, Mr Fingleton studied for the B Comm in UCD at night while working in Dublin.

He qualified in 1967, took first place in the chartered secretaries exam, qualified as a certified accountant and was called to the bar in 1975.

He worked as an accountant with the Dairy Disposal Company, a State organisation that ran creameries, cattle stations and cheese factories, for a number of years before heading to Nigeria for two years where he worked for the charity Concern.

Upon his return he worked in a number of jobs before taking up the post of secretary to a small building society called the Irish Industrial Benefit. That was in 1972.

He put his stamp on the society early on and was successful in increasing its public profile (the name was changed to Irish Nationwide in 1975) and building its customer base. In time "his" society became one of the big four building societies here, many of which were personal fiefdoms in the way the Irish Nationwide remains to this day.

"He is the last of that brigade, the Building Societies of Ireland people who used to hold their meetings in the Shelbourne Hotel and effectively set the interest rates," says a source. "But it would be wrong to simply classify him as a dinosaur."

Mr Fingleton is seen as unique not just in the level of involvement and control he has over every aspect of the financial institution he runs, but also in terms of the dynamic, entrepreneurial attitude he takes. He is seen as someone who is prepared to take risks, to get out and make business.

An example of this is the partnership that Irish Nationwide has with the Ballymore building group in the UK. Irish Nationwide owns 51 per cent of the UK company, Landor (Dundee Wharf) Ltd, which builds apartments in the UK. Ballymore owns 49 per cent. The set-up is unique in the Irish financial sector and sources in other financial institutions wonder what the Central Bank feels about such direct commercial involvement by the building society.

On the other hand, the arrangement has been successful and commercial property investment has contributed significantly to the success of the Irish Nationwide in recent years. Sources say that Mr Fingleton has one of the best property noses there is on the Irish scene.

Working with a small number of developers Mr Fingleton has ridden the back of the Celtic Tiger and profited from the rebound in the UK property market.

It is in this sense that it is untrue to state that Mr Fingleton is a "dinosaur" on the Dublin financial sector scene.

Stories do the rounds about the extent of Mr Fingleton's involvement in the day-to-day running of Irish Nationwide. A story is told of a regional branch manager not fixing a lock on the back door of a branch office because he didn't have authorisation from Mr Fingleton for the expenditure required. Whether true or not, it shows the general view of the extent of his involvement in minor matters.

It is also indicative of the view held as to Mr Fingleton's attitude towards costs. The society prides itself on having the lowest cost-to-income ratio of any Irish financial institution. Again this is a plus in terms of the society's figures but sources also say it may mean the society has not made the level of investment in basic structures that is required.

Any purchaser of the society would have to make substantial investments and would be likely to encounter substantial pressure for pay increases from staff, say some sources.

However Irish Nationwide director Mr Con Power says the society has already begun a programme of investments in preparation for demutualisation and the society being put up for sale.

In 1997, when Fianna Fáil was still in opposition, Mr Bertie Ahern, voiced a commitment to change the law to allow Irish Nationwide be sold. The subsequent Fianna Fáil/PD government, headed by Mr Ahern, made no move on the matter, however. It is thought this was because of concerns expressed by the EBS, which was worried about any change to the protections that exist to prevent its being taken over.

However, the current Government has set up a review group and it is now expected that legislation later this year will allow for the sale of Nationwide while also satisfying EBS. Should such a law be put in place, the sale of Nationwide could occur within 1½ to two years, according to Mr Power.

Mr Fingleton is 65 years old. If legislation to allow Nationwide be sold had been enacted in 1997 or 1998, the society could have been sold in the middle of the boom and Mr Fingleton could have realised a better price. Now he is working against the clock, and market conditions are much less favourable. On the other hand, Mr Fingleton is an able and determined man. The game is not over yet.

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Mr Michael Fingleton is a member of the select and very small group of individuals who have appeared before both the Flood and Moriarty Tribunals in Dublin Castle.

Following his appearance at the Flood Tribunal, Mr Fingleton told the society's 2000 annual general meeting that the tribunal would not find any "skeletons" in Irish Nationwide.

Mr Fingleton appeared in the tribunal to give evidence about the society's efforts to trace documents relating to transactions at its branch on Patrick Street, Cork, during the late 1980s.

During his appearance, tribunal counsel Mr Patrick Hanratty SC said Mr Fingleton's attitude was "cavalier in the extreme".

Mr Fingleton said he refuted any suggestion that the society was avoiding giving the information sought.

A flood in a branch on Grafton Street, Dublin, could have destroyed some of the records being sought, he said.

Mr Fingleton appeared at the Moriarty Tribunal in relation to a bank account Mr Michael Lowry had with Irish Nationwide's bank in the Isle of Man.

Mr Fingleton, a member of the bank's board, said the board had decided it would not be sending an executive to give evidence, as requested by the tribunal.

Mr Fingleton said the society could not force the bank, a subsidiary, to comply, as shifting control of the bank to Dublin could undermine the bank's offshore status.