FORMER IRISH Nationwide Building Society (INBS) chairman Dr Michael Walsh believes the institution “cannot survive” without significant Government support and reorganisation, The Irish Times has learned.
Dr Walsh, who resigned from the INBS two days ago, believes that its board and ultimately Minister for Finance Brian Lenihan should be given an opportunity to provide it with new oversight and leadership.
In a letter yesterday to the society’s company secretary, he said he stepped down as chairman because he believed the board and the Minister should have “absolute flexibility” to assess and implement the changes that may be required. In a letter the previous day, he said he was resigning from the INBS board with immediate effect and cited “unfolding events” at the society without specifying any.
The board said it accepted with great regret his resignation and thanked him for his “enormous contribution” as chairman since May 2001 and as a director from April 1995. “Dr Walsh has informed the board that there are no commercial issues which would have impacted on his decision,” it said.
The board includes two public directors appointed under the terms of the Government guarantee scheme. They are Rory O’Ferrall, a former senior accountant with Deloitte, and Adrian Kearns, outgoing chief executive of the National Development Finance Agency.
“The board understands and fully accepts that he can no longer devote the increasing amount of time required to provide the necessary oversight and leadership in the current challenging times for all financial institutions.”
At a board meeting yesterday, the INBS vice-chairman Terence Cooney was appointed acting chairman until a successor is appointed.
One of six lenders whose liabilities are guaranteed by the State, INBS is the fourth to lose a chairman or chief executive in recent times.
Because of its large exposure to commercial property loans in Ireland and Britain, the society is perceived by many to be in a weakened position. This was reflected in a downgrade on Monday by Moody’s credit rating agency.
INBS became embroiled in the directors’ loan scandal at Anglo Irish Bank when it emerged that it had provided short-term loans to the former Anglo chairman Seán FitzPatrick, loans he used to avoid disclosing the full extent of his own loans from Anglo in its annual accounts.
It emerged this week that tens of millions of INBS’s loans to Mr FitzPatrick were in sterling and US dollars.
