Ex-Irish Nationwide banker hit with ban Former chairman fined over regulation breaches

A FORMER chairman of the Irish Nationwide Building Society has been banned from managing a financial institution for three years and ordered to pay €20,000 by the Central Bank.

Michael P Walsh admitted breaching of financial services law and he agreed to his punishment as part of a settlement agreement.

The breaches concern Irish Nationwide’s management of commercial loans and credit risk from August 2004 to September 2008. They relate to the society’s credit committee’s failure to function in accordance with the society’s own internal policies, its non-reporting to the board of directors, and the failure to establish a credit risk policy.

Mr Walsh held the position of a non-executive chairman of the board from 2001 until 2009. He Settlement: Michael P Walsh was also a member of the building society’s audit committee.

The Central Bank yesterday said in a statement that Mr Walsh was not engaged in the day-to-day management of Irish Nationwide.

It is pursuing a separate investigation into Michael Fingleton, the former managing director – who has yet to fulfil a promise to repay a €1million bonus he received on departure from the institution, which was nationalised in 2009.

Mr Walsh has agreed to his disqualification from management of a regulated financial service provider for three years, to his financial penalty and to a reprimand.

The Central Bank said it was making no comment on any other cases. It emphasised that the settlement relates to Mr Walsh alone ‘and has no effect on the ongoing cases relating to Mr Fingleton’ nor three other directors.

‘The sanctions imposed on Mr Walsh as part of this settlement reflect the seriousness with which the Central Bank regards these issues,’ said a statement from the regulator.

Since 2006, as many as 116 cases have settled under Central Bank sanctions procedure. Cases continue against Mr Fingleton, Gary McCollum, Thomas McMenamin, and John S Purcell.

In 2007 Irish Nationwide recorded pre-tax profits of €360million for 2006.

But the building society suffered badly in 2008 as bad loans spiralled due to the property market crash.

Irish Nationwide made a pretax loss of €280million for the year, after writing off a €464million on bad loans.

The 2010 collapse of the building society cost taxpayers more than €5billion.

In 2011 the building society was merged with the bailed-out Anglo Irish Bank to create the Irish Bank Resolution Corporation, which itself was liquidated in 2013.

In July 2015, INBS was hit with a €5million fine after it admitted to multiple breaches of financial services law and regulation, including persistent failure to comply with its own internal policies and procedures.

Walsh agreed to disqualification