Bank 'did not need bailout'
Bank of Ireland did not need to be covered by a controversial bailout of the country's six main lenders, which has already cost taxpayers 40 billion euro, the bank's chief executive has said.
Richie Boucher said that on the night the state guarantee was brought in - on September 29 2008 - the bank had enough protection to withstand the crisis that was engulfing financial institutions.
Before the Oireachtas Banking Inquiry, Mr Boucher said he was annoyed at rumours around the finance world at the time that Bank of Ireland had asked the government for a guarantee.
"I was annoyed and also felt it was appropriate and necessary to make it clear in the market that Bank of Ireland did not go in and ask for a guarantee for itself," he told the hearing.
"We didn't feel that we needed a guarantee in terms of the pressures we were facing in the market.
"We felt subsequently that we had very significant collateral ourselves."
Mr Boucher gave evidence to TDs and senators that Bank of Ireland had "quite a lot" of financial security through mortgages on properties in Ireland and the UK at the time.
But he said he could not say whether the lender would have needed help three or four weeks after the state guarantee if the international money markets had continued to hammer Ireland's banks.
Mr Boucher said the bank held a top-level late-night credit committee meeting on September 29 to consider a request to give funding to Anglo Irish Bank.
But they learned after midnight it was no longer necessary when the lender's then chief executive Brian Goggins told senior staff the coalition government had decided to effectively insure the country's six main lenders, he said.
Two of the banks, including Anglo, later collapsed.
Mr Boucher said he was involved in talks with the Central Bank weeks before the guarantee about giving financial support to the other doomed lender, Irish Nationwide.
In the event they felt they could not offer the backing.
He said he was "shocked and shaken" at the time by the lack of information available to Irish Nationwide bosses and Central Bank chiefs about the state of the building society's books.
Mr Boucher has been chief executive of Bank of Ireland since 2009.
He joined the lender as deputy chief executive of corporate banking in 2003 and was on the board of directors by 2006.
Before the inquiry, he said 100% mortgages given to borrowers in the run-up to the crash were wrong.
"I think we probably followed the market too much in relaxing our standards," he said.
"Whether or not (the step) was taken prior to my arrival or after my arrival the decisions we took were wrong."
Bank of Ireland was "uncomfortable" with the 100% mortgages and bosses met the financial regulator to see if anything could be done about them, Mr Boucher said.
But he admitted the bank could have refused to handle them if it had felt strongly enough about it.
The hearing was told Mr Boucher was on a salary of 242,000 euro in 2007 and was given a bonus of 615,000 euro the same year.
The following year he took a salary of 550,000 euro with a bonus for the same amount.
In 2009, while Irish taxpayers were pumping 3.5 billion euro into Bank of Ireland, he had a 690,000 euro salary.
Asked to justify the pay packages, Mr Boucher said they were approved by the Minister for Finance and the bank's shareholders "who paid for it".
"I don't have anything further to say on that," he said.
Mr Boucher said he spent his 2007 bonus on Bank of Ireland shares.
"So maybe there is some poetic justice in that," he added.
Cormac McCarthy, former chief executive of Ulster Bank, admitted he made big mistakes during the boom, in an attempt to become a major competitor with Bank of Ireland and Allied Irish Banks.
"In aiming to become a genuine third force in Irish banking, Ulster Bank lent too much money to too many people on the basis of assumptions which turned out to be seriously flawed," he said.
But Mr McCarthy denied the lender took a cavalier or reckless approach to banking,
All the economic indicators from 2003 to 2007 were positive, and the bank had forged an "ill-judged and mistaken strategy" based on the upbeat forecasts, he told the hearing.
"I deeply regret that this happened while I was chief executive of Ulster Bank," he added.
Mr McCarthy said "hand on heart" he made all his decisions in good faith, based on the best information he had at the time.
"I never anticipated the circumstances that transpired in 2008 and beyond and I was mistaken not to have done so," he said.
"I greatly regret the decisions I made while chief executive of Ulster Bank have had the impact they have had on so many lives."