Bank loan

A bank official told the trial he could not recall how often loan value approval limits changed during the Celtic Tiger.

A former bank manager told a trial for theft of millions of euros that she could not remember how often the bank’s loan value approval limits would change during the Celtic Tiger .

Former barrister Michael Lynn (53) is on trial in Dublin Circuit Criminal Court, charged with the theft of around 27 million euros from seven financial institutions.

Mr Lynn, of Millbrook Court, Redcross, Co Wicklow, pleaded not guilty to 21 counts of theft in Dublin between October 23, 2006 and April 20, 2007.

According to the prosecution, Mr Lynn obtained several mortgages on the same properties in a situation where the banks were unaware that other institutions were also providing financing.

The financial institutions involved are Bank of Ireland Mortgages Bank Ltd, Danske Bank, Irish Life and Permanent, Ulster Bank, ACC Bank PLC, Bank of Scotland Ireland Ltd and Irish Nationwide Building Society (INBS).

Giving evidence on Monday, Deirdre Byrne told the court she was assistant manager of Permanent TSB’s business division when Mr Lynn applied for a loan from the bank in 2005.

The court heard that this loan was not the subject of any of the charges brought before the court in this lawsuit.

Ms Byrne told defending Feargal Kavanagh SC that her main responsibility at the time was to assess commercial loans. She agreed that there were limits to the value of the loans she could sanction and that if those limits were exceeded, the loan had to go to someone above her at the bank.

Mr Kavanagh asked that as business grows exponentially in this time of “real estate boom” and Celtic tiger, more and more responsibilities are pushed back with bigger limits set.

Ms Byrne replied that she could not remember how often the limits would have changed, but she remembered that her limit had increased once or twice during that time.

Mr Kavanagh asked if the procedures in place at the time were such that an underwriter did not look behind the loans to see the background or history of the applicant and simply received the application from the branch.

Ms Byrne said she would look to see a payment history as it was primarily assessing the borrower’s ability to repay the loan. She agreed that when the loans are repaid and the repayments are met, that’s all an underwriter needs to consider.

She said that while she was still at the bank in 2007 when Mr. Lynn applied for another loan, she could not recall having had any other relationship with Mr. Lynn.

The trial continues before Judge Martin Nolan and a jury.