Tags: Anglo-Irish | Split | Banks | Ireland

Anglo Irish to Be Split Into Two Banks by Ireland With Portion Wound Down

Wednesday, 08 Sep 2010 10:36 AM

Anglo Irish Bank Corp. will be split into two banks by Ireland’s government and part of the lender will be wound down over time or sold.

Dublin-based Anglo Irish will be split into a “Funding Bank” and an “Asset Recovery Bank,” the finance ministry said in a statement. “It is intended that in due course the Recovery Bank will be sold in whole or in part or that its assets will be run off over a period of time,” it said.

Anglo Irish Chief Executive Officer Mike Aynsley said in an interview earlier that clarity from the government on the future of the bank may help stem a decline in deposits. Customer deposits fell by about 4 billion euros ($5.1 billion) to 23.1 billion euros in the first half of the year and Standard & Poor’s said last month the state may have to inject as much as 35 billion euros into the lender “over time.”

Ireland’s central bank will determine by October how much capital will be needed by both institutions, the finance ministry said.

The bank experienced “material” outflows in recent days because of concerns about its prospects, Chief Financial Officer Maarten van Eden said today. The situation should “stabilize when certainty is restored,” Aynsley said.

The premium investors charge to hold Irish 10-year debt over the German equivalent, Europe’s benchmark, has risen to a record in the past month on concern the cost of bailing out the bank will continue to mount.

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Anglo Irish Bank Corp. will be split into two banks by Ireland s government and part of the lender will be wound down over time or sold.Dublin-based Anglo Irish will be split into a Funding Bank and an Asset Recovery Bank, the finance ministry said in a statement. It...
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2010-36-08
Wednesday, 08 Sep 2010 10:36 AM
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