David Drumm suggested executives should 'zoom in on what has to be done to make the magic number', trial told
David Drumm suggested Anglo Irish Bank executives hold a conference call and “zoom in on what has to be done to make the magic number” in March 2008, a jury has heard.
Matt Moran, former chief financial officer at Anglo, said the target number of customer deposits for the bank's half-year end in March 2008, was €5bn.
Today on day 34 of Mr Drumm's conspiracy to defraud trial, he told Mary Rose Gearty SC, prosecuting, that Anglo was much more focused on a lending as opposed to treasury, and was in his opinion, a lending bank.
Mr Drumm, the former chief executive of the bank, accepts that in 2008 transactions worth €7.2 billion took place between Anglo and Irish Life & Permanent (ILP), but he disputes they were fraudulent or dishonest.
Mr Moran told Dublin Circuit Criminal Court that there was long-running tension between the treasury and lending sides of the bank, and by the end of 2007 Anglo was being run by “lending people”.
Mr Moran said in early 2008, Anglo executives were asked to approach banks they had relationships with to seek funding avenues.
He told the jury there were several matters causing concern and having a direct impact on funding at Anglo in March 2008.
Mr Moran said meetings were often held in Mr Drumm's office on a Friday, where “special balance sheet initiatives” were discussed.
He told Ms Gearty that the bank was looking at multiple sources of funding in order to be in the most favourable position possible at the end of March.
“We basically wanted anything that increased funding or capital and reduced lending,” he said.
He said Mr Drumm asked him to contact John O'Donnell, group finance director of AIB, regarding a transaction whereby Anglo would place money or assets with AIB, who would then place a corporate deposit with Anglo.
Mr Moran said he discussed the proposal with Mr O'Donnell during a game of golf in March 2008 and subsequently on a phone call.
“John told me he spoke to his CEO who said David Drumm needed to speak to him directly, and that the regulator would have to be involved,” he told the jury.
Mr Moran agreed with Ms Gearty that it was his understanding that this transaction with AIB did not go ahead.
He said he only learned the details of the March and June transactions with ILP during a “look-back” in 2009.
He said he believed they came about because ILP had borrowed money from the Central Bank for its 2008 year end and didn't want to repeat this process again as their half-year end loomed.
“The Central Bank was seen as a lender of last resort. Banks didn't want to avail of it in case the read to the markets was negative,” he said.
He agreed with Ms Gearty that a bank who borrowed from the Central Bank looked like “they just couldn't get the money elsewhere.”
Mr Drumm, with an address in Skerries, Co Dublin, has pleaded not guilty to conspiring with former bank officials Denis Casey, William McAteer, John Bowe and others to defraud depositors and investors at Anglo by “dishonestly” creating the impression that deposits in 2008 were €7.2 billion larger than they were.
He has also pleaded not guilty to false accounting on December 3, 2008, by furnishing information to the market that Anglo's 2008 deposits were €7.2 billion larger than they were.
The trial, now in its fifth week, continues before Judge Karen O'Connor and a jury.
