Michael Fingleton
Encyclopedia
Michael "Fingers" Fingleton is a former chief executive of Irish Nationwide Building Society. He joined the building society in 1971 and retired in April 2009 as the effects of the banking crisis became apparent. He is known as “Fingers” in the banking community.
, Co. Sligo in 1938, the son of a local Garda. He attended St Nathy's school in Ballaghaderreen
, and in later years UCD
, TCD
and Kings Inns.
He attended a seminary
, but quit before taking his vows.
In the early Sixties, he joined Allied Irish Finance and simultaneously began studying commerce. On earning his degree
, he went to the Dairy Disposal Agency, a State body that took over defunct creameries in the west of Ireland
. During this period, he studied at night to become a chartered accountant
.
Following this, he joined aid agency Concern
and from 1969 he spent a number of years organising food supplies to the Republic of Biafra, the short-lived secessionist state in southeastern Nigeria
. He eventually became chairman of Concern.
In 1973 he was called to the bar, the same year that Dick Spring
, Michael McDowell
and Adrian Hardiman
were also called, although he never practised as a barrister.
The building society changed its name to Irish Nationwide in 1975 and began to expand. The key to its expansion was marketing, using the media to build the profile of the business. The emphasis was on the use of agents
rather than opening branches. Fingleton built it up into a network of 50 branches and 40 branch agents, helped by the takeover of the Garda Building Society, Irish Mutual and Metropolitan Building Society and enacted a flexible mortgage
policy in the 1980s. Fingleton cultivated relationships with the press and benefitted by receiving free publicity
. Many journalist
s in the 1980s received mortgages from the Irish Nationwide. Fingleton always stressed that these were all above board. During the 1980s, when he was at the height of his media profile, he sent journalists a Christmas card portraying himself as Santa Claus
.
Fingleton drew a salary of €1.3m in 2005, including a €500,000 bonus making his earnings on a par with chief executives of the larger banks.
He began to look for demutualisation legislation in 2001 with the change in the law coming through in August 2006. In 2007, after failed talks with Germany’s HypoVereinsbank
and GE Money, he almost sold the building society to Iceland’s Landsbanki
. Fingleton set Irish Nationwide’s asset value close to €1.3 billion to reflect the equity he expected to be released from any deals. Fingleton expected to earn up to €15 million from the deal. Landsbanki who were initially attracted by Irish Nationwide’s deposit book, backed off, unnerved by the level of the society’s commercial lending. The Icelandic bank collapsed nine months later.
Fingleton had a reputation as an autocrat and effectively ran a one-man lending department with loans of over €500,000 being personally approved by him. In 2002 it emerged that he had an affair with an subordinate who was provided with a £200,000 settlement after she took her case to the Employment Appeals. Tribunal When Irish Nationwides home loans manager Brian Fitzgibbon sued to stop the building society from sacking him in 2007, it reinforced the impression that Fingleton totally dominated the instituition. In his evidence, Fitzgibbon alleged that Fingleton overruled his decision not to lend money to rogue solicitors Micheal Lynn and Thomas Byrne to whom the building society loaned over €10m each. Fitzgibbon went on to allege that the Nationwide's lending decisions "were entirely informal and controlled by Michael Fingleton". Fitzgibbon also stated that many loans issued by the Irish Nationwide had not been approved by its credit committee, which existed only to satisfy the requirements of the Central Bank of Ireland. Fingleton said the society took "adequate provisions" in 2007 for loans to the rogue solicitors as it booked a total loan loss charge of €48.8m.
By the end of 2007, Irish Nationwide had become a major financial institution with pre-tax profits of €390m for 2006 and gross assets of €16.1bn. He had managed to bring the group's cost-to-income ratio down to 10pc from 14.4pc the previous year. The same year, Fingleton transferred a €27.6m pension fund from the society.
In December 2009, Prime Time
after interviewing Olivia Greene, a former home loans supervisor at Irish Nationwide,
reported that former Minister for Finance Charlie McCreevy
was loaned €1.6m for a €1.5m property by Irish Nationwide, when the building society wasn’t supposed to be providing 100 per cent loans. He also provided a loan for Celia Larkin
, the ex-partner of former taoiseach
Bertie Ahern
, without requiring any proof of income. John Mara, the son of former Fianna Fáil
director of elections PJ Mara, was also named in court as having drawn down big loans, including a €1.5 million loan for which Fingleton did not seek any additional security.
Greene also said current Fianna Fáil Senator Francis O'Brien
and Former FF senator Don Lydon
were given fast-track loans of €7m and €3m
institution.
In the run-up to the 2008 annual board meeting, with Fingleton approaching 70, when he would be required to retire as a director, the board considered tabling a motion that would permit him to stay on for another two years. The idea was abandoned and Fingleton refused to stay on as the chief executive unless he was paid the same amount as in 2007, when he had received a €1m bonus. At the end of April 2009, Fingleton retired, buffeted by criticism for receiving the €1m “bonus” in 2008. He left Irish Nationwide relying on the continued support of the Irish government through the guarantee scheme to raise funding from bond investors to keep the institution in business. Losses from 2009 of €2.5bn effectively wiped out all profits made by the society since its inception as Irish Nationwide. Fingleton received €221k in pay for the final four months of his employment, up to April 2009. This amount, calculated on an annual basis, exceeded the cap of €500k imposed by the Government for top bankers.
As the depth of the society’s problems became apparent, Fingleton came under public and political pressure to return the €1m bonus. In April 2010 he offered to give it to charity, but this proposal was rejected by the Irish government. As of December 2010 there was no evidence that the money had been returned.
and frequently attends racing festivals. They have four children. Their son, Michael Fingleton jnr, is a former employee of Irish Nationwide.
Early life and career
Michael Fingleton was born in TubbercurryTubbercurry
Tubbercurry or Tobercurry is a town in County Sligo, Ireland. It lies at the foot of the Ox Mountains, on the N17 national primary road.Tubbercurry has a very active Tidy Towns Project which is setting out to transform the town's visual appearance...
, Co. Sligo in 1938, the son of a local Garda. He attended St Nathy's school in Ballaghaderreen
Ballaghaderreen
Ballaghaderreen is a town in County Roscommon. It is located on the N5 National primary road. The town has become a bottleneck on the N5 route in recent years and the opening of the Charlestown bypass down the road has exacerbated the problem...
, and in later years UCD
University College Dublin
University College Dublin ) - formally known as University College Dublin - National University of Ireland, Dublin is the Republic of Ireland's largest, and Ireland's second largest, university, with over 1,300 faculty and 17,000 students...
, TCD
Trinity College, Dublin
Trinity College, Dublin , formally known as the College of the Holy and Undivided Trinity of Queen Elizabeth near Dublin, was founded in 1592 by letters patent from Queen Elizabeth I as the "mother of a university", Extracts from Letters Patent of Elizabeth I, 1592: "...we...found and...
and Kings Inns.
He attended a seminary
Seminary
A seminary, theological college, or divinity school is an institution of secondary or post-secondary education for educating students in theology, generally to prepare them for ordination as clergy or for other ministry...
, but quit before taking his vows.
In the early Sixties, he joined Allied Irish Finance and simultaneously began studying commerce. On earning his degree
Academic degree
An academic degree is a position and title within a college or university that is usually awarded in recognition of the recipient having either satisfactorily completed a prescribed course of study or having conducted a scholarly endeavour deemed worthy of his or her admission to the degree...
, he went to the Dairy Disposal Agency, a State body that took over defunct creameries in the west of Ireland
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
. During this period, he studied at night to become a chartered accountant
Chartered Accountant
Chartered Accountants were the first accountants to form a professional body, initially established in Britain in 1854. The Edinburgh Society of Accountants , the Glasgow Institute of Accountants and Actuaries and the Aberdeen Society of Accountants were each granted a royal charter almost from...
.
Following this, he joined aid agency Concern
Concern Worldwide
Concern Worldwide is Ireland's largest aid and humanitarian agency. Since its foundation over 40 years ago it has worked in 50 countries and currently employs 3,200 staff in 25 countries around the world. Concern works to help those living in the world's poorest countries to achieve real and...
and from 1969 he spent a number of years organising food supplies to the Republic of Biafra, the short-lived secessionist state in southeastern Nigeria
Nigeria
Nigeria , officially the Federal Republic of Nigeria, is a federal constitutional republic comprising 36 states and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in...
. He eventually became chairman of Concern.
Career at Irish Nationwide
In 1971, he became the secretary of the Irish Independent Building Society, founded in 1873. At the time he was not a homeowner. The building society had five employees and assets of €2 million. In his first year at the helm, the company made a profit of just €12,000 and Fingleton had to wait three years for his first company car.In 1973 he was called to the bar, the same year that Dick Spring
Dick Spring
Richard "Dick" Spring is an Irish businessman and former politician. He was first elected as a Labour Party Teachta Dála in 1981 and retained his seat until 2002. He became leader of the Labour Party in 1982, and held this position until 1997...
, Michael McDowell
Michael McDowell
Michael McDowell is a Senior Counsel in the Bar Council of Ireland and a former politician. A grandson of Irish revolutionary Eoin MacNeill, McDowell was a founding member of the Progressive Democrats political party in the mid-1980s...
and Adrian Hardiman
Adrian Hardiman
Adrian Hardiman has been a justice of the Supreme Court of Ireland since 7 February 2000. He received the rare honour of being appointed directly from the Bar to Ireland's highest court. Many commentators were surprised by his appointment as he was a relatively young man making it likely he would...
were also called, although he never practised as a barrister.
The building society changed its name to Irish Nationwide in 1975 and began to expand. The key to its expansion was marketing, using the media to build the profile of the business. The emphasis was on the use of agents
Agency (law)
The law of agency is an area of commercial law dealing with a contractual or quasi-contractual, or non-contractual set of relationships when a person, called the agent, is authorized to act on behalf of another to create a legal relationship with a third party...
rather than opening branches. Fingleton built it up into a network of 50 branches and 40 branch agents, helped by the takeover of the Garda Building Society, Irish Mutual and Metropolitan Building Society and enacted a flexible mortgage
Mortgage loan
A mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan...
policy in the 1980s. Fingleton cultivated relationships with the press and benefitted by receiving free publicity
Public relations
Public relations is the actions of a corporation, store, government, individual, etc., in promoting goodwill between itself and the public, the community, employees, customers, etc....
. Many journalist
Journalist
A journalist collects and distributes news and other information. A journalist's work is referred to as journalism.A reporter is a type of journalist who researchs, writes, and reports on information to be presented in mass media, including print media , electronic media , and digital media A...
s in the 1980s received mortgages from the Irish Nationwide. Fingleton always stressed that these were all above board. During the 1980s, when he was at the height of his media profile, he sent journalists a Christmas card portraying himself as Santa Claus
Santa Claus
Santa Claus is a folklore figure in various cultures who distributes gifts to children, normally on Christmas Eve. Each name is a variation of Saint Nicholas, but refers to Santa Claus...
.
Fingleton drew a salary of €1.3m in 2005, including a €500,000 bonus making his earnings on a par with chief executives of the larger banks.
He began to look for demutualisation legislation in 2001 with the change in the law coming through in August 2006. In 2007, after failed talks with Germany’s HypoVereinsbank
HypoVereinsbank
UniCredit Bank Aktiengesellschaft is the sixth-largest private German financial institution, with a strong presence in Bavaria. The company is based in Munich, and together with Deutsche Bank, Dresdner Bank, Commerzbank and Deutsche Postbank, it belongs to the Cash Group...
and GE Money, he almost sold the building society to Iceland’s Landsbanki
Landsbanki
Landsbanki, also commonly known as Landsbankinn in Iceland, is a private Icelandic bank with international operations...
. Fingleton set Irish Nationwide’s asset value close to €1.3 billion to reflect the equity he expected to be released from any deals. Fingleton expected to earn up to €15 million from the deal. Landsbanki who were initially attracted by Irish Nationwide’s deposit book, backed off, unnerved by the level of the society’s commercial lending. The Icelandic bank collapsed nine months later.
Fingleton had a reputation as an autocrat and effectively ran a one-man lending department with loans of over €500,000 being personally approved by him. In 2002 it emerged that he had an affair with an subordinate who was provided with a £200,000 settlement after she took her case to the Employment Appeals. Tribunal When Irish Nationwides home loans manager Brian Fitzgibbon sued to stop the building society from sacking him in 2007, it reinforced the impression that Fingleton totally dominated the instituition. In his evidence, Fitzgibbon alleged that Fingleton overruled his decision not to lend money to rogue solicitors Micheal Lynn and Thomas Byrne to whom the building society loaned over €10m each. Fitzgibbon went on to allege that the Nationwide's lending decisions "were entirely informal and controlled by Michael Fingleton". Fitzgibbon also stated that many loans issued by the Irish Nationwide had not been approved by its credit committee, which existed only to satisfy the requirements of the Central Bank of Ireland. Fingleton said the society took "adequate provisions" in 2007 for loans to the rogue solicitors as it booked a total loan loss charge of €48.8m.
By the end of 2007, Irish Nationwide had become a major financial institution with pre-tax profits of €390m for 2006 and gross assets of €16.1bn. He had managed to bring the group's cost-to-income ratio down to 10pc from 14.4pc the previous year. The same year, Fingleton transferred a €27.6m pension fund from the society.
Loans to politicians and other public figures
As well arranging loans for journalists, Fingleton arranged loans for other political and public figures.In December 2009, Prime Time
Prime Time
Prime Time is an Irish news analysis, current affairs and politics programme. It is broadcast on RTÉ One on Tuesday and Thursday nights between 21:30 and 22:10. It is currently presented by Miriam O'Callaghan, who has presented the programme since its commencement in 1996...
after interviewing Olivia Greene, a former home loans supervisor at Irish Nationwide,
reported that former Minister for Finance Charlie McCreevy
Charlie McCreevy
Charles "Charlie" McCreevy is a former Irish politician. He was the European Commissioner for Internal Market and Services from 2004–2010. He was first elected to Dáil Éireann as a Fianna Fáil TD in 1977 and held the seat in Kildare until 2004 when he became Ireland's European Commissioner...
was loaned €1.6m for a €1.5m property by Irish Nationwide, when the building society wasn’t supposed to be providing 100 per cent loans. He also provided a loan for Celia Larkin
Celia Larkin
Celia Larkin is a former Irish civil servant and was the partner of then Irish Taoiseach Bertie Ahern. Their relationship ended in April 2003. Ahern is separated, though not divorced, from his wife. There was some controversy in the media at Ahern's public presentation of his partner...
, the ex-partner of former taoiseach
Taoiseach
The Taoiseach is the head of government or prime minister of Ireland. The Taoiseach is appointed by the President upon the nomination of Dáil Éireann, the lower house of the Oireachtas , and must, in order to remain in office, retain the support of a majority in the Dáil.The current Taoiseach is...
Bertie Ahern
Bertie Ahern
Patrick Bartholomew "Bertie" Ahern is a former Irish politician who served as Taoiseach of Ireland from 26 June 1997 to 7 May 2008....
, without requiring any proof of income. John Mara, the son of former Fianna Fáil
Fianna Fáil
Fianna Fáil – The Republican Party , more commonly known as Fianna Fáil is a centrist political party in the Republic of Ireland, founded on 23 March 1926. Fianna Fáil's name is traditionally translated into English as Soldiers of Destiny, although a more accurate rendition would be Warriors of Fál...
director of elections PJ Mara, was also named in court as having drawn down big loans, including a €1.5 million loan for which Fingleton did not seek any additional security.
Greene also said current Fianna Fáil Senator Francis O'Brien
Francis O'Brien
Francis "Francie" O'Brien is a former Irish Fianna Fáil politician. He was a Senator from 1989 to 2011, elected by the Agricultural Panel....
and Former FF senator Don Lydon
Don Lydon
Donal John Lydon is a psychologist and a former Irish politician. He was a Fianna Fáil member of Seanad Éireann from 1987 to 2007, being elected on the Labour Panel.-Professional career:...
were given fast-track loans of €7m and €3m
Effects of the economic crisis and retirement
The performance of the building society crashed in 2008 as bad loans spiralled. Irish Nationwide made a pretax loss of €280 million for the year, after writing off €464 million on bad loans, a 10-fold increase on the 2007 figure. The state was eventually forced to inject €2.7 billion into the society to shore up its balance sheet and prevent the collapse of a government-guaranteedCredit Institutions (Financial Support) Act 2008
The Credit Institutions Act 2008 is an Act of the Oireachtas was a piece of emergency legislation decided on by the Government on Tuesday Sept 30 and enacted on Thurs Oct 2nd to provide a eur 440 billion guarantee to six Irish banks to prevent possible collapse as a result of the Global financial...
institution.
In the run-up to the 2008 annual board meeting, with Fingleton approaching 70, when he would be required to retire as a director, the board considered tabling a motion that would permit him to stay on for another two years. The idea was abandoned and Fingleton refused to stay on as the chief executive unless he was paid the same amount as in 2007, when he had received a €1m bonus. At the end of April 2009, Fingleton retired, buffeted by criticism for receiving the €1m “bonus” in 2008. He left Irish Nationwide relying on the continued support of the Irish government through the guarantee scheme to raise funding from bond investors to keep the institution in business. Losses from 2009 of €2.5bn effectively wiped out all profits made by the society since its inception as Irish Nationwide. Fingleton received €221k in pay for the final four months of his employment, up to April 2009. This amount, calculated on an annual basis, exceeded the cap of €500k imposed by the Government for top bankers.
As the depth of the society’s problems became apparent, Fingleton came under public and political pressure to return the €1m bonus. In April 2010 he offered to give it to charity, but this proposal was rejected by the Irish government. As of December 2010 there was no evidence that the money had been returned.
Personal and family
Michael Fingleton is married to his wife, Eileen. They live in Shankill in South Dublin. He enjoys horse racingHorse racing
Horse racing is an equestrian sport that has a long history. Archaeological records indicate that horse racing occurred in ancient Babylon, Syria, and Egypt. Both chariot and mounted horse racing were events in the ancient Greek Olympics by 648 BC...
and frequently attends racing festivals. They have four children. Their son, Michael Fingleton jnr, is a former employee of Irish Nationwide.
See also
- Sean FitzPatrickSean FitzPatrickSeán FitzPatrick was chairman of Anglo Irish Bank until he resigned in December 2008 amid mounting revelations over hidden loans...
- Irish property bubbleIrish property bubbleThe property bubble in the Republic of Ireland began in 2000 and peaked in 2006, as with many other western European countries, with a combination of increased speculative construction and rapidly rising prices....
- 2008–2009 Irish financial crisis2008–2009 Irish financial crisisThe 2008–2011 Irish financial crisis, which had stemmed from the financial crisis of 2008, is a major political and economic crisis in Ireland that is partly responsible for the country falling into recession for the first time since the 1980s...