Fast-tracking approval of bank credit limits 'just not normal', former Anglo official tells trial
A former senior banker at Anglo Irish Bank has told a jury that the practice of fast-tracking the approval of credit limits at the bank was not normal.
Tony O'Hanlon, who was head of credit at Anglo, told David Drumm's conspiracy to defraud trial at Dublin Circuit Criminal Court that he had concerns about the way the bank was run.
The witness said he was unable to sign off on a €6.7bn credit increase for Irish Life and Permanent in September 2008 as he could not authorise it retrospectively.
David Drumm (aged 51) of Skerries, Co Dublin, has pleaded not guilty to conspiring with former bank officials Denis Casey, William McAteer, John Bowe and others to defraud depositors and investors at Anglo by “dishonestly” creating the impression that deposits in 2008 were €7.2bn larger than they were.
The former Anglo Irish CEO has also pleaded not guilty to false accounting on December 3, 2008, by furnishing information to the market that Anglo's 2008 deposits were €7.2bn larger than they were.
Today, Mr O'Hanlon told Sinead McGrath BL, prosecuting, that he received an email on September 29, 2008 from Mike Nurse, head of risk at Anglo.
Mr Nurse instructed Mr O'Hanlon not to include ILP's name in the daily interbank excess report that he distributed to other members of staff at Anglo.
“It’s very unusual, I have never seen anything like this in my banking background,” Mr O’Hanlon told Ms McGrath.
The jury viewed an email sent to Mr O'Hanlon by a colleague on October 1, 2008.
It stated that ILP's credit limit was €500m but its exposure was €7.2bn, exceeding this limit by €6.7bn.
Ms McGrath asked Mr O'Hanlon if he was asked to sign off on this credit increase.
The witness said he had “no ability” to do so retrospectively and therefore could not.
During cross-examination, Mr O'Hanlon agreed with Brendan Grehan SC, defending, that credit increases that took place at Anglo were “often on-the-corridor type of conversations”.
He also agreed that regarding ILP's credit increase, the paperwork did not quite keep up with what happened.
“The fast-track approach in Anglo was just not normal in a banking environment,” Mr O'Hanlon told the jury.
Mr Grehan put it to the witness that he had not seen any emails from him to colleagues in 2008, outlining his concerns.
“I had concerns about the way this bank was run, I had concerns about their systems, their policies, their procedures,” Mr O'Hanlon said.
“I suggest you're showing hindsight, as this is not in your statement,” Mr Grehan said.
Mr Drumm accepts that multi-million euro transactions took place in between Anglo and Irish Life & Permanent (ILP) in 2008 but disputes that they were fraudulent or dishonest.
The trial, which is now in its twelfth week, continues before Judge Karen O'Connor and a jury of ten men and four women.
