Belfast Telegraph

Third taxpayer cash boost for bank

Almost 23 billion euro of taxpayers' money has been ploughed in to bailed-out Anglo Irish Bank after the EU passed a third cash injection.

The European Commission gave state-aid approval for another 10 billion euro for the state-owned lender, with 1.4 billion euro of that set aside for now.

A spokesman for Finance Minister Brian Lenihan said the move was essential to ensure the bank continues to meet its regulatory capital requirements while the European Commission examines a restructuring plan.

"The capital figure has been estimated by the bank and has been assessed by the NTMA, the Minister's advisors on banking matters," he added.

The department confirmed 22.9 billion euro has now been paid out to the troubled bank - up from Mr Lenihan's prediction of 22 billion euro in March.

The increase relates to discounts on loans transferred to the Government's National Asset Management Agency (NAMA) and losses on the non-NAMA loan book.

Officials in Brussels revealed Ireland notified them at the end of June that it needed a further capital injection of 8.5 billion euro, to be paid to Anglo over the next two years.

It gave approval to 10.054 billion euro, with a contingency of 1.4 billion euro depending how much NAMA pays for loans it is taking on from the bank.

Commission vice-president for Competition, Joaquin Almunia, said Anglo Irish Bank needed the third emergency recapitalisation to meet its obligations since the beginning of the financial crisis. Some four billion euro was approved in 2009 and 10.44 billion euro granted last March.

The EC stressed the state aid was necessary because impairments and losses on Anglo's entire commercial loan book have continued to increase due to the poor quality of the book, the drop in prices on the commercial property market and the ongoing crisis in financial markets.


From Belfast Telegraph