Anglo Irish/INBS restructuring plan 2011-2020

TheStory.ie has obtained a confidential plan submitted by Anglo Irish Bank/Irish Nationwide to the European Commission, which was put together by a working group from the Department of Finance, the NTMA, the Central Bank, Anglo and INBS.

The plan, dated January 31, 2011 was submitted to the European Commission for approval and was guided by the agreement reached between the Irish authorities, the EU, the IMF and ECB in November 2010. It outlines in detail the workout plan for the IBRC entity from now until 2020, under two headline scenarios – a base and stress scenario.

  • Under the the base scenario, IBRC says it could lose €3.5bn between 2011 and 2020, while under the stress scenario it could lose €8.1 billion. The bulk of these losses would be incurred in 2011/2012. It projects a loss of at least €400m between 2016 and 2020.
  • IBRC’s residential loan book will be prepared for eventual sale, probably in 2015. A 30% haircut is expected in the stress scenario leading to a loss to the taxpayer of €300 million.
  • Under a stress scenario outlined by the bank, IBRC will need an additional €3.2bn of equity capital which will be ‘drip fed’ across the plan period. The injections are required to keep an 8% total capital ratio. This drip feeding will be done in tranches of €1.7bn, €1.3bn, €0.01bn, €0.04bn and €0.2bn.
  • IBRC will be reliant on the Central Bank/ELA funding for the duration of the plan, right up to 2020. IBRC will need €36.7bn funding from the CBI/ELA by 2015 and €15.9bn by 2019 under the base case.
  • IBRC had to fund €18bn of non-Euro exposure (out of €49bn total from CBI/ELA), which was 60% sterling and 40% US dollar
  • The total cost to the taxpayer for IBRC under the stress case is estimated at €35.8bn (this includes INBS and Anglo remember).
  • Operating costs for IBRC were €405m in 2010 (Anglo and INBS before they were merged), with projections for operating costs of between €217m and €250m in 2012. The largest savings are expected from staff reductions of 39% to 1,075. Wealth management will be sold or wound down over a period of five years.

    I intend releasing the full 66 page plan on TheStory.ie.

    • Howlin's compromise on pay rejected by the Taoiseach

    Brendan Howlin, the Minister responsible for overseeing a pay cap for special advisers, tried repeatedly to come to a compromise agreement on the pay of Ciaran Conlon.

    The negotiations over the bumper salary of €127,000 that was finally set out for Mr Conlon show that Brendan Howlin had serious concerns about it and did not believe it could be justified under any circumstances.

    He also said it would set a poor example and would provoke other Ministers into seeking higher pay for their advisers, or ask for salaries – that were already agreed – to be renegotiated.

    The new emails, obtained from the Department of Public Enterprise, show that the Department of the Taoiseach repeatedly intervened in the process and would not accept a compromise of ca €115,000, which Howlin had pleaded with them to accept.

    It would have presented a face-saving solution to the sensitive problem and was still, as Mr Howlin himself pointed out, a 25% increase on the original offer. In the end, he caved in following a demand that came directly from the Taoiseach [see below post].

    Some of the documents on which this are based are posted here, with the more important exchanges coming towards the end.

    A lengthy story that I wrote, which outlines it in further detail, is available here:

    These new emails, now released by the Department of Public Expenditure and Reform,  should, to my mind, have already been released under an FoI request that was submitted to the Department of Jobs, Enterprise and Innovation about the same matter.

    That they were not is suspicious. The decision on their release is currently being appealed and will in due course be made known to the Information Commissioner.


    Enda Kenny overruled two Ministers to give €35,000 pay rise

    Taoiseach Enda Kenny personally intervened to have a special adviser awarded a salary of €127,000, 37 per cent more than had been recommended.

    These are some of the Department of Enterprise communications, obtained under the Freedom of Information Act, which outline the chain of events leading to the decision.

    After the general election, Ciaran Conlon was appointed as an adviser to Enterprise Minister Richard Bruton. Under new guidelines set out by the Department of Finance, a salary cap had been put in place for such positions, ranging from around €80,000 to €92,000 per year. It appears from the emails however, that Mr Conlon had already been promised an annual wage of €127,000.

    A difficulty arose when both Minister for Public Expenditure Reform Brendan Howlin and Finance Minister Michael Noonan refused to grant this higher salary. A memo in the Department of Enterprise explained that they were willing to pay him at the higher end of the scale, approving a pay level of €92,000.

    Ciaran Conlon, a former communications chief with Fine Gael, was not happy with this, writing in an email: ‘This is getting ridiculous. The minister sent over a memo on this issue weeks ago. This has been passed at the very highest level in Government Buildings.’

    Enda Kenny then intervened with his private secretary writing to the Department of Public Expenditure and Reform and expressing the Taoiseach’s wish for a salary of €127,000. The Department caved in and a new contract for Mr Conlon was drawn up.

    The story I wrote in this week’s Mail on Sunday outlines what happened in more detail:

    http://www.dailymail.co.uk/news/article-2069731/How-Irish-PM-ordered-officials-break-salary-cap-old-friend-PR-adviser.html

    Here are the documents:


    Anglo vs the Commissioner for Environmental Information

    I received notice party documents yesterday from McCann Fitzgerald solicitors in to the impending case between Anglo Irish Bank and the Commissioner for Environmental Information. NAMA are also taking a similar case. Both are in relation to requests I submitted to both organisations in early 2010.

    To be clear here: my sole motivation is the public’s right to know more about Anglo Irish Bank and the National Asset Management Agency – two organisations that are costing the State a fortune, and are two of the most important bodies in the history of the State. The Environmental Regulations were the only avenue open to me from a right to information standpoint – so I have pursued the case, in partnership with Fred Logue, who holds similar views – and we intend seeing it through to the end.

    These are the court documents:


    David Drumm's response to Anglo

    As Simon Carswell outlines in this morning’s Irish Times, David Drumm has responded to Anglo in documents filed in court on Monday. It makes for very interesting reading.

    News geeks among you: here are the court documents which flew onto my computer faster than you can say bankrupt. The docuuments are in response to an earlier document submitted by Anglo, outlining their case. It is directly below this one – they need to be read in conjunction with each other.



    HSE southeast assets registry 2010

    This is the assets register for HSE southeast for 2010. I will be gradually publishing all assets registries for the HSE over the coming weeks. HSE South is the only exception, as they have been unable to export the data to a spreadsheet.

    The data includes the building assets, land assets, vehicles assets, equipment, computer equipment, computer software of HSE Southeast.

    Downloadable spreadsheet

    HSE chief executive appointments diary 2010/2011

    As part of an ongoing process. This is the appointments diary of the HSE’s chief executive from January 2010 to August 2011. Cathal Magee became chief executive in September 2010, with Brendan Drumm before him.


    Department of Environment fixed assets registry

    In case you ever wondered, this is the fixed assets registry of the Department of the Environment. The total original cost of the assets was €71,974,935.65, which has been depreciated by €12,649,299.34 to €38,496,075.13.

    The registry details all the fixed assets, including tables, chairs, computers, bogs, vehicles (not sure why they are there) and how much was paid per item.

    Of note was the €29,766.00 and €14,915.79 spent on carpet for Minister Gormley’s corridor at Custom House Quay, though as an old building it probably would have required expensive carpet.

    Full sheet for download