The Republic’s Department of Finance has admitted it does not know how much the Anglo Irish Bank bailout will cost, despite promises by Finance Minister Brian Lenihan that the bill would not run to more than €23bn.
As critics raised the spectre of a blackhole swallowing billions more in taxpayers' cash, the European Commission gave the Irish government permission to plough another €10bn into the embattled bank — on top of the €14bn already approved.
But the department yesterday admitted there was a “significant risk” the Anglo bill might rise even further.
Industry sources suggested that Anglo could need another €2.5bn, depending on the discount the state's bad bank NAMA applies to the troubled Anglo loans it takes on later in the year.
The news comes just weeks after Lenihan said he was “confident” the cost of saving Anglo and Irish Nationwide would be no more than “€23bn to €25bn”.
Opposition politicians have slammed the bailout’s cost, saying the money would end up in a blackhole and never be seen again.
Sources last night said the ultimate cost of Anglo's bailout would not be known until the nationalised bank has transferred all €36bn of loans marked for NAMA.
The first €9bn was transferred at a discount of 55% earlier in the summer, but the discount rate for the remaining €27bn will not be known for several months.
“If the discount rate rises to 65%, you could be talking about Anglo needing another €2.5bn,” one source said.
In its statement, the Department of Finance admitted there was “considerable uncertainty” around the discounts that would be applied to the rest of Anglo's NAMA transfers.
The loss Anglo may take on the rest of its loan book is listed as another “uncertainty”, as well as the outcome of the EC's decision on Anglo's restructuring plan.
“Because of the uncertainty facing the bank, there is a significant risk that further capital will be required by it in the future,” the department said.