It is October 2008, just weeks after the government was forced to guarantee bank liabilities worth more than 200% of Ireland's entire GDP. Eugene Sheehy, AIB chief executive, is making a presentation to private clients of Goodbody Stockbrokers in Dublin. Despite widespread predictions of bank nationalisations, huge dividend cuts and fire sales of overseas assets, Sheehy gives a passionate "crisis, what crisis'' speech to the audience. "We'd rather die than raise equity,'' he tells the attendees. On 11 February, AIB was accepting €3.5bn of government capital.
It is a year on from Northern Rock and Irish banks continue to be slaughtered on the stock exchange, with Anglo Irish and AIB bearing the burnt of concerns over their exposures to property loan losses. Capital retention is the name of the game. However, AIB stuns the financial markets in Ireland and the UK with an extraordinary 10% dividend increase, citing a "strong capital base''. Eugene Sheehy is unapologetic, even though Bank of Ireland shortly afterwards pared back its payout. All around Europe, analysts assert that AIB will be forced to raise hundreds of millions, possibly billions, in fresh equity, but the bank ploughs ahead with the dividend increase regardless.
Then chairman of AIB, Dermot Gleeson, would have known the bank's May annual general meeting was going to be stormy, but the barrister never expected his biggest challenger to be a retired egg-thrower from Blackrock, Co Dublin. Gary Keogh (66) hurled several eggs at Gleeson and Co as he opened the meeting, with the residue of one egg remaining stuck to the wall behind Gleeson for the entire duration of the meeting. As befitted Gleeson's somewhat aloof personality, the chairman simply brushed the egg yolk off his sleeve and resumed the proceedings. Despite hours of recrimination and ferocious criticism, the bank's executives refused to speak to the media afterwards to explain any of the events of the previous 12 months.
One was an AIB lifer, an ex-branch manager, one was a successful senior counsel known for pugilistic exchanges in the courts. Eugene Sheehy and Dermot Gleeson arrived at the reception of the Department of the Taoiseach on 29 September requesting an urgent meeting. Nobody really knows what happened at the subsequent meeting with senior members of cabinet and AIB has refused to ever give any detail on the exchanges, with Eugene Sheehy simply saying: "Our interest in stability and the government's would have been very much aligned.'' The bank denied vociferously any suggestions in previous weeks and days that liquidity was a problem, but both gentlemen found themselves on 29 September admitting that the entire Irish financial system could collapse. Nothing was ever the same again for the bank or for the country.
RTE's Morning Ireland was the place to be on 6 February 2002, when the bank's chief executive Michael Buckley took to the airwaves to explain that AIB had discovered a huge fraud at its US subsidiary Allfirst. Neither the final amount of the fraud or the name of the trader involved was revealed by Buckley and the bank was very much in damage-limitation mode. However, later massive attention came on AIB's own internal controls and later again it was revealed that rogue trader John Rusnak had been trading recklessly since 1997. The whole scandal left one commentator fuming that AIB management were not fit to be in charge of a "rural sub-post office".
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