Business | Economy
Irish government poised for $7b bank bailout
The Irish government is planning to inject a total of around 5 billion euros (Dh25.5 billion) into the country's three main banks in the first phase of a recapitalisation process, two Irish newspapers said on Sunday.
- Reuters
- Published: 23:51 December 21, 2008
Dublin: The Irish government is planning to inject a total of around 5 billion euros (Dh25.5 billion) into the country's three main banks in the first phase of a recapitalisation process, two Irish newspapers said on Sunday.
The move would involve an effective nationalisation of Anglo Irish Bank, which has been at the centre of a loans scandal, and significant investment in the two biggest financial institutions, Allied Irish Banks (AIB) and Bank of Ireland, the papers said, without specifying sources.
None of the three banks were immediately available to comment.
The Irish edition of The Sunday Times and the Dublin-based Sunday Business Post both said the government would put one billion euros into Anglo Irish in return for a stake of up to 80 per cent, and invest two billion each into AIB and Bank of Ireland.
Private investors would be invited to subscribe for one billion of new shares in each of the two big banks, The Sunday Times said.
It further reported that if these shares were not taken up, the government would undertake to buy them, bringing its total outlay to some seven billion euros.
Pressure on the government to act over the banks intensified following the resignation of Anglo chairman Sean FitzPatrick and chief executive David Drumm last week.
This was after FitzPatrick revealed that he had transferred loans of around 87 million euros, which he had received from the bank, to another bank before each year-end over a total period of eight years.
Due to this transfer, the loans, which FitzPatrick said he received on commercial terms, did not appear in annual accounts available to shareholders.
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