BANKING ON TOM CHAPTER 13

 BANKING ON TOM CHAPTER 13

 

FRIDAY

 

Tom arrived at the office as normal at 7.00am. Jim Whitty greeted his as he entered.

‘Everything OK Mr. Nolan?’  enquired Jim.

Tom knew he was fishing. On paper Jim may have been the lowliest employee. But he missed nothing. He saw everyone who came into the Bank and everyone who left. And the manner of their arriving and leaving. Nothing escaped his eagle eyes.

‘Nothing I can share with you Jim. But as soon as I can I will tell you. You will be among the first to know.’

Tom felt it was the least he could offer a soldier who had given fifty years of service. Tom placed relationships ahead of rank.

When he arrived in his office, he found a note from Jim asking him to meet at 10.00 to discuss the limits for counterparties. When Maura and Steph arrived, he asked them to join him in his office. His PA Jill brought in a full jug of steaming coffee and chocolate biscuits. Tom tucked in; Maura politely refused the biscuits. As did Steph who would normally pile in.

Maura had flown home last night to an empty unlit home, a detail she chose not to share. She did however share the news that Ben Osborne had not only got approval for the deal, but effectively he had got sanction to replicate the deal if the initial positions had been closed out, thereby doubling their opportunity and possible reward. It was of course entirely possible that the investment bankers in New York discovered the ruse and got to smell the coffee they were drinking. But nothing ventured nothing gained remarked Maura.

 

Great news perhaps, but theoretically it doubled Steph’s work. She prided herself on getting things one hundred percent correct and this would certainly test her. A Bank was only as good as its admin system. IBB’s admin systems excelled. Many clients paid a premium just for the certainty of execution. Saving one percent on execution meant little if the deal could not be executed.

 

Later that morning Tom would go through the process of having his own limits approved. It was something of a false war. Everyone knew what was happening and agreed with it, whether reluctantly or not.  The formal approval was largely ceremonial. In the real world the deal was going forward. Their ducks seemed to be lining up. The Fernandez money was already in place and in escrow. The underwriting commitments from the insurance companies had been faxed through. London Board approval was confirmed. The fact that the approval actually allowed a repeat of the trades once completed did not go unnoticed.

 

Tom briefed Jim at 10.00. Jim was initially taken aback by the latitude of the approval, effectively allowing a double dip, without increasing risk. He stroked his beard a few times.

‘Sounds good’ he offered ‘As long as we are absolutely sure the first trades have been completed and the risk removed.’.

At 12.00 Tom presented to the Credit Committee. He was a good performer at Credit Committee. Presenting at Credit Committee was a performance, not unlike an actor on the stage. Bankers who knew their business back to front could be reduced to nervous wrecks in front of the Committee where no prisoners  were taken. It was not unlike the Roman Games where the prisoners faced the lions. Some people who did not impress Monday to Thursday somehow came alive on Friday.

 

Tom was normally assured and confident. But he was nervous. While the insurance companies almost eliminated the risk, the Bank could still lose a lot of money.

‘On a very bad day, how much money could we lose Tom’ asked Richard head of accounting.

Tom could have blinded everyone with science and told a few fibs, but it was not in his nature.

‘on a very bad day, five million pounds. A whole year’s profits’ answered Tom.

There was an intake of air in the room.

‘are we comfortable that the Fernandez family are investing in this?’ asked Michael in internal audit

‘Yes Richard. They have put the money in escrow. They are big depositors with the Bank with a very good track record. I have known them for twenty years. They are people of ability and integrity. They don’t like losing money so I can’t see them investing in anything they haven’t researched’

Richard did not give up

‘Are we happy to share with BBB? Its our deal. If it works well, we will never get so much as a thank you. If it fails, we will never hear the end of it’

Tom looked to Jim O Driscoll for support. Neither man could share with the Committee the latest news about BBB which might change people’s minds.

‘I think it’s important we share this with BBB’ offered Jim. They reduce our risk;  they make the deal more attractive tho the insurance companies. While its new and unusual I am happy Tom has diminished our risk and it’s a good  risk reward ratio.

Jim’s intervention carried the day. Tom was happy when the Meeting finished. Credit Committee was a strange animal. You just never knew its mood in advance.

 

In London Ben was beaming. His head of Trading Robert was beaming too. Double the limits meant double the trading meant double the profits meant double the bonuses. Robert was tempted to place a deposit on the Ferrari he always fancied that very afternoon. Robert normally worked until trading subsided around 1.30. Today he abandoned ship at 12.30 and headed for his favourite wine bar and became drunk very quickly. This would be a weekend to remember. By the end of business the following Friday the US investment banks would be rubbing their eyes in disbelief. The British for once would have stolen a march on them. This would surely open the doors in any and every Investment Bank he chose to approach.

 

Arturo Fernandez was a cautious investor. Life had taught him the world was a complicated place. Knowledge was everything. He spent a lot of money on cultivating sources in all the industries he was involved in. His biggest investment was in the Banks. He typically had the good and bad news before the directors of the Bank.  His sources were telling him that a niche Bank in Como had approved in principle that very morning the acquisition of IBB Bank in Dublin. This could be very bad news indeed if the acquisition prevented the successful conclusion of Tom’s trading program in a week’s time. It was unlikely that Banco di Como would welcome a trade of this size, no matter how profitable. They might choose to wait until the week after, which would be fine. But any deal next week could torpedo the mission. The Fernandez family were unlikely to earn such a huge profit in an afternoon’s trading ever again. The Fernandez family were wealthy. But like any good wealthy family they wanted to be even wealthier.

 

When in doubt Arturo always called on his brother Jimmy. They had a simple lunch in the office of chicken sandwiches washed down with milk. Alcohol was never considered before 6.00 in the evening, earliest. Jimmy was cool and calculating. They simply could not live with this risk. It had to be eliminated.

 

Arturo did not ask Jimmy any more questions. The decision had been made.

 

Within an hour Jimmy was on a train bound for Holyhead. He reasoned travel by boat was more invisible than by plane. In his company was Holly an attractive blond in her mid-thirties. Holly was a prostitute and did not come cheap. Typically several hundred pounds a night. Steve was ex-army having served in the SAS. Steve had served in the North of Ireland during the Troubles and knew Dublin like the back of his hand. He was leafing through an innocuous publication. The Irish Bankers Journal. On the front was the photo of the incoming President of the Bankers Federation with his honorary robe and chains, none other than Dominic Fallon.

 

Jim was in his office eating lunch when the phone rang. It was Dominic Fallon.

‘Hi Jim, just give you the news. I hope its good news. The Board in Como have given the green light to the merger. You and I need to travel to Como first thing on Monday to meet the Board and fill in the blanks. As long as your figures can be verified, we should have a full approval and we can complete within seven days or so. We are conscious there may be another bid, so first up is best dressed.’

 

‘That’s great Dominic. I think the merger would be perfect. One plus one equalling three. I’ll cancel my meetings for Monday and see you in the airport on Monday first light. I might bring my wife Maureen . She can go shopping and enjoy the sights.

‘Good idea Jim. My girlfriend Dee is overdue a trip so they can keep each other company.

Jim had an ulterior motive. He wanted his wife Maureen to meet the folk in Banco di Como. She was a good judge of character. Perhaps better than him. He tended to let the figures make the case. Maureen felt it was all about people.

 

Jim’ rang Maureen and sked her to get her bags ready for Monday. His next call was to Sebastian.

‘Good news Sebastian, Banco di Como are on board and may close the deal as early as next week. Tom will be disappointed, but that’s just a detail’

‘Great news Jim. I have news of my own. I have spoken to some wealthy Irish investors and I think it likely we will have an offer from new Irish shareholders. The offer is likely to be in the range of forty to fifty million and of course there would be no management changes. IBB would continue on her merry way. I would have to stay on for a year. Then I would hotfoot it out of Merrion Square. You might even think at that stage of moving upstairs.’

Jim was amazed at how quickly Sebastian had moved. He was not sure whether to be happy or sad. For better or worse, Tom’s deal would almost certainly go through with the new money arriving sometime in March. IBB would remain independent and life would continue. Against that the idea of a merger with Banco di Como was attractive. The future of banking, whatever his sentiment, would be in amalgamation. Grow bigger of die. The law of the banking jungle. But it was a nice option, and a nice problem if it came through.

 

Jim decided he would head home early Friday afternoon. He had his game of golf arranged for 10.00 the following morning. Something to keep him sane. One way or another IBB was unlikely to have British ownership by year end.

 

 In Banking things often moved glacially and then suddenly.