Clarification statement from Anglo Irish Bank Corporation Limited relating to transactions with Irish Life & Permanent plc
Given the publication of a statement by Irish Life & Permanent plc (ILP) this morning (Friday 13 February), the Bank wishes to clarify a number of issues relating to the subject matter of that statement.
Anglo Irish Bank’s Annual Report & Accounts for the year ended 30 September 2008, which are due to be issued on 20 February 2009, contain extensive disclosure on funding and liquidity, including detailed maturity analysis across all funding categories. The Accounts highlight amounts received from non-bank affiliates of banking groups and concentration in amounts placed with banks covered by the Irish Government guarantee scheme.
Anglo Irish Bank Corporation has had an active counterparty relationship with ILP for a long period of time. As part of ongoing business activity, this relationship has included placements and receipts of deposits from bank and non-bank affiliates, with transactions categorised as deposits from banks or non-retail customers as appropriate. Since the onset of the global liquidity crisis, this level of business activity intensified to significant levels and reflected the mutual provision of support by each institution. Anglo Irish Bank confirms that it sought and received deposits from ILP during 2008, including the last two weeks of September 2008.
Anglo Irish Bank’s Annual Report & Accounts explain the following in respect of the Group’s balance sheet which totalled €101 billion at 30 September 2008:
- Loans and advances to banks included short term placements of €7.5 billion with ILP.
- In the course of its business Anglo Irish Bank receives deposits from non-bank affiliates of banking groups which are shown within non-retail customer funding.
- Where no set-off arrangements exist between deposits and loans, accounting standards require that such deposits are recorded separately as liabilities in the balance sheet.
- At 30 September 2008 Anglo Irish Bank had deposits of some €7.3 billion relating to Irish Life Assurance plc.
We wish to clarify that the interbank placements with ILP were not cash collateral for deposits from Irish Life Assurance plc and no set-off arrangements existed.
Anglo Irish Bank confirms that ILP asked for and was provided with interbank deposits throughout 2008 and significant funding through a €3.45bn security repurchase arrangement as at 30 June 2008. Half of this amount matured on 3 July with the remainder maturing on 4 September. Anglo Irish Bank was asked for and provided to ILP significant funding through another security repurchase arrangement involving a total of €4.1bn in December 2008. This arrangement was unwound at their request on 23 December 2008. At 31 December 2008 Anglo Irish Bank had provided funding totalling €0.9bn to ILP and received funding totalling €0.4bn from ILP.
The Bank confirms that all transactions have been appropriately recorded in its books and records and financial statements and in its daily, weekly and monthly regulatory returns.
The Chairman of Anglo Irish Bank, Donal O’Connor, said:
“The Board has instigated a comprehensive review of the process around these transactions including the extent of external consultation relating to them. The Board wishes to emphasise that it is fully committed to ensuring that, as a State-owned Bank, the highest standards of corporate governance and business ethics be observed in Anglo Irish Bank, in the interests of all its stakeholders”.
ENDS
Contact Details: Drury Communications – Billy Murphy / Martha Kavanagh / Karen Ferris +353 1 2605000