Ireland

Anglo Irish: a brief history

Anglo Irish Bank was founded in 1963 and debuted on the Dublin Stock Exchange in 1971

JOHN COLLINS
Sat Jan 17 2009 - 00:00

Anglo Irish Bank was founded in 1963 and debuted on the Dublin Stock Exchange in 1971. For many years it was one of Ireland’s smallest banks and was controlled by the Manchester-based Kennedy family.

  • 1977 Anglo has deposits of £2 million, cash and government securities of £1.2 million and net assets of £100,000.
  • 1978 Anglo was acquired by City of Dublin Bank, through its Irish Bank of Commerce subsidiary, in a £100,000 all-cash deal. An Irish Times report on the purchase stated that the Central Bank of Ireland "was worried about the financial position of Anglo" as between 1972 and 1976, it had built up losses of £300,000.
  • 1980 Bank turns a profit of £100,000 and primarily provides instalment credit.
  • 1986 City of Dublin Bank is renamed Anglo Irish Banking Corporation. Seán FitzPatrick, who had been general manager of Anglo, becomes chief executive of the enlarged group.
  • 1987 Establishes Isle of Man operations to support growing sterling loan book. Deposits swell to almost £125 million.
  • 1988 Profit grows by 54 per cent to £2.2 million. Chairman Gerry Murphy boasts that the oldest senior executive is 42.
  • 1992 Anglo director and 15 per cent shareholder John Clegg is forced to resign following British newspaper reports that he may have been involved in money-laundering for the IRA.
  • 1993 Anglo claims to be taking deposits of £1 million a day during the currency crisis but Murphy reassures shareholders that "Anglo does not, has not and will not speculate". Annual profits reach £7.3 million. In July the "Clegg holding" of 18 million shares is finally sold.
  • 1995 Bought Royal Trust Bank (Austria), a subsidiary of Bank of Canada, which has no loan book but deposits of £235 million providing "a cheap source of funding for future lending", says director Tiernan O'Mahoney. FitzPatrick says Anglo's target market is asset backed loans averaging £400,000. Deposits exceed £1.4 billion.
  • 1998 Anglo establishes a US operation in Boston and purchases units of Credit Lyonnais Bank in Austria for £10.1 million. Profits rise 49 per cent to £45.1 million.
  • 1999 Buys Smurfit Paribas Bank for £30 million cash.
  • 2001 46 per cent rise in pre-tax profits to €194.8 million, about a third of which is generated overseas. FitzPatrick says Anglo aims to increase lending at 15-18 per cent each year. Defending the levels of directors' remuneration, he says the bank has "a policy that rewards success".
  • 2004 David Drumm (37) is appointed chief executive as FitzPatrick steps down after 22 years at the helm. He earned €2.3 million in his last year in the job.
  • 2005 Profits increase by 36 per cent to €685 million as deposits hit €41.7 billion. In December it buys a chain of DIY stores in Germany for €175 million.
  • 2007 Profits break €1 billion for the first time as net lending hits €67.1 billion. Mr Drumm describes the results as "stellar".
  • 2008
  • March 17th – Anglo loses 15 per cent or almost €1 billion of its value as market rumours circulate about its exposure to bad debts.
  • May 7th – Anglo shares gain 5.1 per cent after the bank said its pretax profits increased 17 per cent to €649 million in the six months to March 31st
  • July 15th – The family of businessman Seán Quinn takes a 15 per cent stake in Anglo.
  • September 30th – Following overnight negotiations, Minister for Finance Brian Lenihan moves to guarantee deposits and debts totalling €400 billion at six Irish-owned lenders, including Anglo.
  • December 3rd – Share price hits an 11-year low as the company announces a 37 per cent drop in profits and that it is setting aside €500 million for bad loans. Anglo is valued at €509 million.
  • December 18th – FitzPatrick resigns as chairman following revelations that he moved personal loans totalling €87 million off the balance sheet approaching the end of the last eight financial years.
  • December 19th – Drumm resigns saying the appointment of a new chairman and chief executive would give the bank "fresh impetus".
  • December 21st – Government reveals it will invest €1.5 billion in Anglo for 75 per cent of its voting rights.
  • 2009
  • January 15th – The Government decides it will not recapitalise Anglo and instead takes it into State control.