Written answers

Thursday, 30 September 2010

Department of Finance

Banks Recapitalisation

10:30 am

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 123: To ask the Minister for Finance the extent of funds provided to each financial institutions on foot of the banking recapitalisation agreement; the full extent of future funds likely to be required by each institution; and if he will make a statement on the matter. [34122/10]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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A total of €22.9 billion has already been provided by the State to support Anglo Irish Bank since the bank was nationalised early in 2009. The additional €6.4 billion announced earlier today brings the projected total cost of the restructuring of Anglo Irish Bank to €29.3bn in the base case scenario that I announced today.

In the case of Irish Nationwide Building Society, the National Treasury Management Agency have recommended that I provide a further €2.7bn representing a prudent estimate of the capital required to cover expected losses on the institution's residual loan book and bringing the total capital support to the institution to €5.4bn.

€3.5 billion each has already been invested in both Allied Irish Banks and Bank of Ireland. The Financial Regulator has confirmed that Bank of Ireland has sufficient capital to meet the PCAR standard.

In the case of Allied Irish Banks additional capital of up to €7.9 billion will be required. Of this amount, €5.4bn is to be raised through a placing and open offer to shareholders underwritten by the NPRFC using, if necessary the conversion of up to €1.7bn of the State existing preference shareholding and the use of the NPRFC's cash balance to make up any remaining shortfall. The balance, €2.5bn, will be made up through the sale of AIB's stake in M&T Bank and disposal of other assets in due course. Any residual capital requirement may be met from a subsequent conversion of the remaining preference shares to the extent that this may prove necessary.

The Educational Building Society has to date received €350 million. The Society is in discussion with a number of parties about its future and any adjustment in its capital need that arises will be accommodated in the outcome of those discussions in due course.

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