t was just after ten on that Thursday morning when Kennedy burst into the boardroom room where Fitzwilliams was thumbing through the daily papers.
‘Look at this will you Fitz,’ he said waving a copy of The Irish Times.
Pat had just arrived from Dublin. An hour’s flight on the bank’s Gulfstream and thirty minutes in his chauffeur-driven Mercedes from the City Airport.
‘One hundred feckin billion in liabilities!’
Fitzwilliams nodded grimly. The same news was splashed across the front pages
I
of London’s leading dailies.
‘The only hope is some kind of nationalization for the Allied Irish and the Anglo
Irish.’
‘The quicker the better.’
‘What about the government?’
‘The Taoiseach should be announcing a four hundred billion bank guarantee plan
later today.’
‘Feck Biffo! If this fecking shit continues we’ll go under with all the other poor
feckers!’
Kennedy clammed up. He had never seen Fitzwilliams in such a blasphemous
rage.
‘Look Pat this is really serious. What I want you to do is draw up a list of all our liabilities in Ireland and ditch them wherever you can. I don’t care about the price,
just get rid of them, now! The boat’s going down and we don't want to go down with it. It’s a matter of life or death…I mean it!’
‘It’ll cost us,’ said Kennedy fearing for the bank’s solidity.
‘It’ll cost us a lot more if we don’t cut our losses! Now! Another thing, stop any deals we’ve got with the government. We can use their help to get rid of some of
the shit we’ve got on our books, but we don’t want any hand-outs with strings.’
‘I agree with you Michael,’ replied Kennedy. ‘The last ten or so years were a
blast, now it looks as if we’ll have to pay for it.’
‘Not we Pat! Not over my dead body!’
It was a huge comedown for Kennedy, a fierce supporter of Ireland, the Celtic
Tiger, and just about everything Irish going back to Finn McCool. The dream was turning into a nightmare. The once-lauded Celtic tiger had been shot and was about to be skinned, stuffed, and mounted.
‘Look Pat, I’d like you to go back to Dublin, now, and sit down with Tommy
McLaughlin to see what kind of shit we’ve really got on our feckin books.’
‘Yesh Fitz.’
‘Oh yes…and whilst we’re on the subject of kicking the feckin ant hill I’ve
something else for you to look at when you get back.’
Kennedy had not asked Fitzwilliams what that something else was, the banker had been too livid and it was not worth the risk of provoking even greater wrath.
The next morning back in Dublin, Pat started the day with a haircut at the
Waldorf, the city’s oldest barbershop. There were not that many customers in a
place well known to bankers, businessmen, and lawyers. Only three barbers were clipping away compared to seven or so during the boom years. It was not surprising considering the price; seventy pounds a shampoo and shave.
‘Things are quiet,’ remarked Kennedy as he settled himself in the barber’s chair.
‘Times are hard, but remember,’ said Paddy his elderly barber, ‘history is made
by the people who turn up.’
‘That sounds like an oracle talking.’
23
‘Lenin.’
‘You’re turning Communist?’
‘No, but I soon will be at the rate things are going.’
‘It’s that bad?’
‘Yeah, take Bewleys, the coffee shop next door.’
‘As far as I know, it’s been closed for a couple of years.’
‘Well, it was bought by a developer five years back for twenty-five million with a
loan from AIB. The bank was left with it on their hands when the developer went
bust so they put it on the market for twelve million.’
‘Twelve million!’
‘Yeah, but I reckon it’s worth only half that at today’s prices.’
‘They were crazy. Look at the money AIB and the Ulster bank put into their new headquarters. They’re all bust now!’
‘Nationalized.’
‘Same thing.’
‘A lot of people stuffed their pockets and all those poor feckers who listened to
them won’t be flying to New York to do their Christmas shopping this year.’
Kennedy left a good tip and then headed down to the offices where McLaughlin had drawn up a list of liabilities. Kennedy’s world was so different from that of his barber’s he was totally untouched by the state of Ireland’s working families. The
bad news simply bounced off him, and as for the bank, they would
come up with a solution.
As far as Kennedy was concerned banking had always boiled down to a business where two people with opposite, but complementary needs, got together for a
contractual exchange of services, and he, as the service provider, collected a
margin. Things were different now, he thought as he approached the bank’s Dublin office, it was a whole new ball game that would need a creative solution. If they
could unload their bad loans off onto NAMA (the National Asset Management
Agency), it would solve a good part of the bank’s Irish difficulties. Keeping things in separate compartments was important to him.
The bank’s Irish operations under Michael Fitzwilliams’ direction had known a
different development path to that of the other Irish banks. After Fitzwilliams
shifted the bank’s center of gravity to London, following its merger with the
Nederlandsche Nassau Bank and the creation of INB Holdings Plc., the Irish end
had become less important and its customer base entirely Irish, with certain of its
key administrative and back-office tasks controlled from London.
The Dublin headquarters of Irish Netherlands Bank Ltd., previously the Irish
Union Bank Ltd., situated opposite Trinity College on College Green, had not changed. Its discrete but imposing style; a polished granite façade, smoked glass windows, and heavy brass nameplates, was timeless. The whole appearance was
more in keeping with the tradition of an old banking firm than the arrogantly
modernist tower in London.
24
INB was blessed compared to Ireland’s major banks, it had avoided not all, but most of their sins. With the creation of INB Holdings Plc. in London, most
international businesses had been transferred to the holding company, though Dublin
carried out much of the routine bookkeeping work.
Major Irish banks, like AIB, had expanded their operations into the United
Kingdom, the USA, Poland, Latvia, Estonia, and Lithuania, but remaining solidly
Irish with their headquarters in Dublin. AIB and Bank of Ireland, not to be
confused with Banc Ceannais na hÉireann, Ireland’s Central Bank had competed
for size and ultimately for indebtedness and both banks, as a consequence of their
folly was forced into nationalization.
INB Dublin was covered by the state guarantee and assisted by the recently set up
National Asset Management Agency. NAMA was created as a vehicle to buy
troubled land and property development loans from the six major Irish banks
covered by the government guarantee, together with other banks that voluntarily
chose to join the scheme ― amongst them INB.
That did not arrange all of Fitzwilliams’ problems. Over the previous weeks, the bank had unloaded a good part of its problematic Irish engagements, however,
certain of the loans were issued by INB Holdings Plc. in London, or Amsterdam,
which were not covered by those guarantees. Amongst those was the Oak Park office and apartment complex in south Dublin, built by James Farrell’s construction firm Tain Developments. Farrell, another troubled high-profile property developer,
personally owed over one billion euros to Irish and UK banks.
‘Tain Developments will be wound up by the court next week,’ Kennedy
informed Fitzwilliams.
‘Serves that bastard Farrell right for screwing us.’
Irish Netherlands would be forced to write off Tain’s debts and would end up the owner of Farrell’s Oak development. It was one in the long, long, list of property development, construction, and contracting firms that had gone under in Ireland. As luck would have it the development was practically complete and situated in a
good area of south Dublin, though that small satisfaction was dampened by the fact buyers would be far and few between for a long time to come.
Ireland still lived in the 19th century as far as debt and bankruptcy were concerned with one of the toughest bankruptcy laws in Europe giving creditors all the powers.
In Irish law, those who borrowed money were bound to pay it back in full. Those who could not, or would not, were hounded until the last penny was paid, and ran the risk of seizure and imprisonment. Their only hope was exile.
Most of INB’s bad Irish loans would be offloaded onto NAMA, which would no
doubt end up by being the biggest landowner in Ireland, with the state owning a
mountain of long term debt, something that did not concern Fitzwilliams in the
least.
‘Well that’s one more taken care of,’ Kennedy said grinning and rubbing his
hands together.
‘Remember what Pyrrhus said, Pat.’
Kennedy looked non-plussed, wondering if Pyrrhus was a Dutchman.
‘If we are victorious in one more battle with the Romans, we shall be utterly ruined,’ Fitzwilliams told him with a wicked smile.