The Curious Case of Anglo's Austrian Deposits - SBP

[Larry]

Very interesting article by Kathleen Barrington in today’s SBP (“The Curious Cae of Anglo Irish Bank and its Austrian Deposits”, Markets Page 3). It doesn’t say a lot beyond recounting the bald facts based on info in the public domain, but it is pregnant with innuendo. I’m sure we’ll have a link on it tomorrow, but for now this seems to be the broad outline of Barrington’s story:

Anglo owned a private Austrian bank for some period during the fake boom. 2001 is the earliest date in the article confirming Anglo’s ownership of this bank, so it obviously owned this subsidiary from some point in time before that.

Barrington says that this bank was important to Anglo’s depositing-gathering operation for many years - reflected in the fact that a board member of the Austrian operation was placed on the Anglo board in 2001.

On September 5 2008 Anglo announced that it was selling this bank to Swiss banking group Valartis. The sale was completed on December 19, 2008 - the day after Sean Fitzpatrick resigned as Anglo Chairman.

Barrington points out that 2008 would have been a very odd time to sell a deposit-generating subsidiary like this given the dire need Anglo had for cash at that time. The sale resulted in the loss of a large amount of deposit capital, Barrington asserts - a total of €600m according to Anglo’s 2009 Annual Report.

Indeed, it appears that Seanie was so keen to sell this Austrian operation that he even leant Valartis money to buy the business from Anglo.

What was the nature of this Austrian bank? Barrington says it had about 4,000 private customers managing about €1.6b for them. Moreover, this bank was subject to Austrian derogations from the EU Savings Directive such that the identities of its customers did not need to the revealed to the authorities. Privacy seemed to be the defining characteristic of the operation.

Barington’s money shot comes in one small para near the end of the piece and is related to this high level of confidentiality:

Let’s hope those clients don’t include any Irish depositors who might owe money to Anglo, to other struggling Irish banks or to the Irish taxpayer.

…

In the piece, the points Barrington seems most at pains to convey are the importance of the deposits to Anglo in 2008, the extreme confidentiality of the the Austrian subsidiary and Sean Fitzpatrick’s unusual anxiety to sell the business.

[BoyRacer]

PSST! The Scoop On Austrian Money Secrets: Ironclad Secrecy, First-Class Amenities…And (If You Qualify) Instant Citizenship ~ by Mark Nestmann → escapeartist.com/efam/76/Liv … stria.html
December 2005

Austrian Banking: Low Profile, Professional And Very Secret

The foundation for these joint ventures are solid relationships with Austria’s commercial banks, of which Bank Austria is the largest. But behind the retail counter, up the back stairs, and behind locked doors are the thriving private banking departments of Austria’s banks.

Why consider Austria for banking at all with neighbouring Switzerland beckoning? While Switzerland is a larger and much-better known private banking center, Austria’s banking tradition is itself more than 200 years old. Accounts and securities investments are available in all major markets and currencies. Austrian banks offer an impressive range of services: the ability to purchase foreign currencies and CDs, offshore stocks and bonds and options, precious metals, and (particularly for non-U.S. persons) offshore funds. In other words, you’ll find the same capabilities at Austrian banks as in Switzerland, but with somewhat lower fees and with a much lower profile.

There’s just one catch—most of Austria’s private banking departments cater to investors in Austria and other German-speaking countries. But there’s one bank—Anglo-Irish Bank in Vienna—that caters to an international, English-speaking clientele.

All Austrian banks are subject to Austria’s bank secrecy laws—some of the world’s most stringent. The practical consequence is that the small army of professional asset trackers, information brokers and corporate espionage specialists which advertise their ability to uncover assets in U.S. bank and securities accounts will be completely thwarted if they try to pry information out of an Austrian bank.

there is more

[BoyRacer]

Probe into Italy mafia money laundering → news.smh.com.au/breaking-news-wo … -pqst.html

Banks in Austria were used to launder about 2 billion euros ($A3 billion) for the Italian mafia between 2005 and 2007, the Austrian weekly profil reports, citing Rome prosecutors.
According to prosecution documents, the money was laundered through 14 accounts at Raiffeisen Zentralbank, Bank Austria - which now belongs to Italy’s UniCredit Group - and the Austrian branch of Anglo Irish Bank, profil said on Sunday.
The transfers were performed by Italian internet provider Fastweb and Telecom Italia Sparkle (TIS), it noted.

there is more

[BoyRacer]

Local Press Release – Sale of Austrian Private Banking Subsidiary → angloirishbank.at/eng/Local_ … diary.html

Local Press Release – Sale of Austrian Private Banking Subsidiary

Vienna, September 5, 2008

Valartis Group to acquire Anglo Irish Bank (Austria) AG[link]

• Anglo Irish Bank (Austria) AG will become Valartis Bank (Austria) AG
• Transaction strengthens international Private Banking activities of Valartis Group
• Valartis Bank (Austria) AG will operate as an independent subsidiary
  [/link]

The SWX Swiss exchange quoted Valartis Group AG will acquire Anglo Irish Bank (Austria) AG as part of the enlargement of its private banking and asset management activities. This acquisition will facilitate the successful expansion of the Valartis Group into the EU.

This sale follows the successful disposal by Anglo Irish Bank Corporation plc of its Isle of Man trust operations in 2006 and of its Swiss private bank earlier this year. The move is consistent with Anglo Irish Bank Corporation plc’s strategic focus on its core secured lending businesses in Ireland, the UK and the US together with its complementary global treasury business and its Irish and UK wealth management businesses.

Subject to regulatory approval, it is intended that the sale will be completed within three months.

Commenting on the sale, Ernst Abensperg-Traun, CEO of Anglo Irish Bank (Austria) AG said – “We are delighted to be a part of the Valartis Group in the future. With Valartis, we are gaining a partner who is specialised in asset management and has a successful history in the business. Our clients will certainly benefit from the Swiss “savoir faire“, to which we are now gaining access“.

Following the approval of the regulatory authorities, the Bank in Vienna will continue to operate as an independent subsidiary under the new name of Valartis Bank (Austria) AG. The Bank will strengthen its focus on target markets as well as its product range. Commenting on potential synergies, Ernst Abensperg-Traun said – “Both businesses, with their commitment to delivering the highest standards of international private banking services, strongly complement each other and are ideally matched to build on their respective traditions”.

Anglo Irish Bank (Austria) AG provides asset management services for both domestic and international customers. The Bank offers a diversified range of fund products, through its investment funds subsidiary, AIBC Anglo Irish Bank (Austria) Kapitalanlagegesellschaft mbH, which is also being acquired by the Valartis Group. The Bank’s core business has grown considerably in recent years. The Bank currently has approximately 100 employees and 3.500 customers.

The acquisition of Anglo Irish Bank (Austria) AG represents a significant expansion of the Valartis Group’s wealth management activities. The purchase will provide strong and lasting support to the revenue-generating model of the Valartis Group, which is based on the three pillars of Asset Management, Wealth Management and Investment Banking. Moreover, new growth opportunities will be opened up as a result of the increased presence in the Eastern Europe and Russia/CIS markets, joint collaboration on asset management products, and a broader offering of private banking services.

The Valartis Group and Anglo Irish Bank Corporation plc have signed a binding agreement regarding the sale of Anglo Irish Bank (Austria) AG. Both parties have agreed not to discuss details of the sale price.

Separately,Anglo Irish Bank Corporation plc is retaining its long established Austrian branch, Anglo Irish Bank Corporation plc Zweigstelle Wien, and will further invest in its significant deposit gathering and wider treasury activities.

there is more

[2Pack]

Alan Dukes should be perfectly well aware of any monies transferred from Anglo Dublin to Anglo Austria, he can run a report anytime and can investigate the activities of Anglo staff who fronted for Anglo Austria in the Anglo ‘private clients’ section

He would be well advised to look at inbound transfers from Anglo Austria too

[BoyRacer]

Anglo Irish Bank sells Austrian private banking subsidiary to Swiss group → finfacts.ie/irishfinancenews … 4646.shtml

Anglo Irish Bank today announced that it has agreed to sell its Austrian private banking subsidiary, Anglo Irish Bank (Austria) AG, to Valartis Group AG, a listed Swiss banking group with international wealth management and asset management as well as investment banking activities. Subject to regulatory approval, the sale is expected to complete within three months.

On 7th May 2008, Anglo released its results for the half year to 31st March 2008 with pre-tax profits of €667 million (+16%) and total assets of €101.4 billion. The Austrian private bank contributed 1% of Anglo’s pre-tax profits and had net assets of €76 million. Anglo says the sale, which will be accretive to Anglo’s capital base, follows the successful disposal of Anglo’s Isle of Man trust operations in 2006 and of its Swiss private bank earlier this year. It says the move is consistent with Anglo’s strategic focus on its core secured lending businesses in Ireland, the UK and the US together with its complementary global treasury business and its Irish and UK wealth management businesses.

Commenting on the transaction, David Drumm, Group Chief Executive, said: "Anglo has developed a successful international private banking business in Austria with a particular focus on central and eastern Europe. Valartis will be an excellent partner to the business, its clients and employees, bringing complementary product and services expertise while ensuring continuity of outstanding client service.

Separately, we are retaining our long established Austrian branch and will further invest in its significant deposit gathering and wider treasury activities."

there is more

[BoyRacer]

Anglo Irish Bank - The History → politicalworld.org/showthread.php?t=3395

Nipper reminded us yesterday that the Anglo Irish Bank took over the notorious Ansbacher Bank in 1990.

I also notice that Anglo Irish has a Swiss operation - Anglo Irish (Suisse).

The impression could be got from current comment that Anglo Irish had a squeaky clean and uniformly successful past, and that all had suddenly and unexpectedly gone wrong in the last couple of years.

Taking a look at the past of Anglo Irish undoubtedly will shed some light on the present and future.

there is more

[yoganmahew]

I’ll repeat my questions - who are the borrowers, what did they borrow for and how much do they owe?

It sounds awfully like looting…

[Open_Window]

Plunder.

[Boston]

This is very interesting. I remember being in a meeting with Anglo executives about 4 years ago and the topic of Banking in Austria came up (cant remember why). One of tha anglo guys mentioned that when they bought the Austrian operation they expected the considerable deposits to leave over time but they never did. He mentioned that they were pay nearly no interest on the deposits to the customers, they just sat there earning nothing and no one ever transferred them from the Bank.

Very strange, I thought at the time.

[gavinsblog]

Then there’s the whole Iraq connection.

[2Pack]

LOL Gavin , what Iraq connection ??? There was the IRA money laundering angle in the early 1990s of course but that was not the bank itself as much as their largest shareholder.

[mr_anderson]

Someone could say ‘the alien connection’ and, in the context of anglo, it could not be dismissed off-hand !

[BlameGame]

@Boston

This is very interesting. I remember being in a meeting with Anglo executives about 4 years ago and the topic of Banking in Austria came up (cant remember why). One of tha anglo guys mentioned that when they bought the Austrian operation they expected the considerable deposits to leave over time but they never did. He mentioned that they were pay nearly no interest on the deposits to the customers, they just sat there earning nothing and no one ever transferred them from the Bank.

Very strange, I thought at the time.

Ha Ha Are you being serious? Was he winking when he told that tale?
A professional banker couldn’t figure that one out?

It’s either untaxed money from rich Germans or really dodgy money from Italy.

[gavinsblog]

@2Pack

LOL Gavin , what Iraq connection ??? There was the IRA money laundering angle in the early 1990s of course but that was not the bank itself as much as their largest shareholder.

Nope not that

[mr_anderson]

@gavinsblog

@2Pack

LOL Gavin , what Iraq connection ??? There was the IRA money laundering angle

in the early 1990s of course but that was not the bank itself as much as their largest shareholder.

Nope not that

Ve have vays of making you talk Gavin !

[CaveCanem]

In short, FitzPatrick chose to sell an Austrian bank with a €600 million deposit book in September 2008, even though the bank was under enormous pressure on the funding front. Remember, it was in the six months leading up to September 2008 that Irish Life & Permanent controversially assisted Anglo in creating the impression that Anglo’s balance sheet was stronger than it actually was.

Indeed, it seems that FitzPatrick was so anxious to flog the Austrian business that he was even prepared to lend Valartis some of the money to buy the business from him

sbpost.ie/post/pages/p/wholestory.aspx-qqqt=THE+INSIDER-qqqs=themarket-qqqsectionid=3-qqqc=3.7.0.0-qqqn=1-qqqx=1.asp

Seannie selling customer deposits when the anglo group later that month would do a dodgy transaction with ILP to turn interbank loans into customer deposits (still no arrests!).

There is a possibility that people, who owe Anglo money, have stashed money in this Vienna operation. And whereas these borrowers may pass losses to the taxpayer, they could have their secret funds safely tucked away.

You won’t get this information from Valartis, though it may be possible to run a query on Anglo’s transaction database to identify transfers to the vienna bank.

[jmc]

@2Pack

LOL Gavin , what Iraq connection ??? There was the IRA money laundering angle in the early 1990s of course but that was not the bank itself as much as their largest shareholder.

Albert Reynolds and associates and the Oil for Food program…

[jmc]

@BlameGame

@Boston

This is very interesting. I remember being in a meeting with Anglo executives about 4 years ago and the topic of Banking in Austria came up (cant remember why). One of tha anglo guys mentioned that when they bought the Austrian operation they expected the considerable deposits to leave over time but they never did. He mentioned that they were pay nearly no interest on the deposits to the customers, they just sat there earning nothing and no one ever transferred them from the Bank.

Very strange, I thought at the time.

Ha Ha Are you being serious? Was he winking when he told that tale?
A professional banker couldn’t figure that one out?

It’s either untaxed money from rich Germans or really dodgy money from Italy.

Italian money goes to Switzerland, Slovenia, Croatia and Malta. German money to Switzerland, Luxembourg and the Netherlands. Lichtenstein used to be the preferred final resting place for German money but those days seem to be over. Austria is for the Eastern Europeans and money that needs to buried deeper than is possible in Switzerland.

[2Pack]

@CaveCanem

There is a possibility that people, who owe Anglo money, have stashed money in this Vienna operation. And whereas these borrowers may pass losses to the taxpayer, they could have their secret funds safely tucked away.

You won’t get this information from Valartis, though it may be possible to run a query on Anglo’s transaction database to identify transfers to the vienna bank.

That query would be exactly what I have in mind, I would run a further set of queries on funds that magicked out of that bank into Anglo over the years and for whose benefit.