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High Court directs auction of deposits/ assets of Anglo Irish Bank and Irish Nationwide Building Society; Anglo reports loss of €17.6bn in 2010
By Finfacts Team
Feb 8, 2011 - 3:55 PM
The High Court today directed that an auction of
the deposits and corresponding assets of Anglo Irish Bank and Irish Nationwide
Building Society can take place immediately. Anglo Irish Bank said it expects to
report a loss of €17.6bn in 2010.
Earlier Tuesday, the Minister for Finance applied
to the court under Part 2 of the Credit Institutions (Stabilisation) Act 2010,
which was passed into law last December.
Today's move is the commencement of a process for
restructuring in accordance with the provisions of the EU/IMF Programme of
Financial Support for Ireland.
The direction orders from the High Court in
respect of Anglo Irish Bank Corporation Limited (Anglo) and Irish Nationwide
Building Society (INBS) are to:
(i) Enable the National Treasury Management Agency (NTMA) to begin a process, in
accordance with EU State aid rules, to transfer deposits and assets held by both
institutions to a third-party credit institution or institutions; and
(ii) Take the initial steps to implement the restructuring plan for Anglo and
INBS as submitted to the European Commission for approval at the end of January
These orders facilitate the Minister’s plan to restructure the two institutions
which is in accordance with the provisions of the EU/IMF Programme of Financial
Support for Ireland.
The direction orders were granted by the High Court under the Credit
Institutions (Stabilisation) Act 2010.
The NTMA said it will immediately commence an auction process to invite
interested, fully- licensed financial institutions to tender for Anglo and INBS
deposits. It is intended that this process will conclude as quickly as possible.
The NTMA said the initial steps to implement the restructuring plan for Anglo and INBS will
involve the deposit transfer process and the preparation of the INBS and Anglo
loan books for their orderly work out in a manner which minimises losses. The
process will also involve the amalgamation of Anglo and INBS into a merged
entity regulated by the Central Bank of Ireland.
The direction orders begin the process of restructuring Anglo and INBS as
envisaged in the restructuring plan in a manner that benefits from necessary
legal protections and is recognised in other EU Member States.
The NTMA said deposits will be transferred in a seamless manner and no action is required by
depositors. It said it should be noted that the position of depositors in Anglo and INBS
remains fully secure and that any transfer will take place, and be accepted by
another credit institution, on the basis of the existing terms and conditions.
Depositors will also continue to have full access to their funds both during and
after the auction process.
The NTMA says the position of employees in the business areas of Anglo and INBS
that will be affected by the transfer of deposits will be safeguarded in
accordance with applicable employment legislation.
Depositors will continue to have full access to
their funds during and after the auction process.
Anglo said today it expects to report a loss of
€17.6bn in 2010.
update, the bank said this would include a loss of €11.5bn on assets
transferred to the National Asset Management Agency and €7.8bn set aside to
cover other loan losses.
The nationalised bank said it expects to transfer another €1.1bn of loans to
NAMA. It said it had received State support of €29.3bn over the past two years.
Anglo said it employed just under 1,300 people at the end of 2010, down 16% from
a year earlier.
When the loan losses are excluded, the nationalised bank made an operating
profit of €1.8bn, mainly due to a buyback of some of its subordinated bonds.
Headcount at December 2010 was 1,296 representing a decrease of 16% over the
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