Anglo Irish bank to be nationalised

by Gill Montia

Story link: Anglo Irish bank to be nationalised

The Irish government is in the process of nationalising Anglo Irish Bank, the Republic’s third-largest bank.

Plans to inject €1.5 billion (£1.4 billion) into the lender, in return for a 75% stake, were rejected by ministers yesterday when it was decided that the sum would not be sufficient to recapitalise the bank.

Anglo Irish is seen as particularly vulnerable to the collapse of the Irish property and construction sectors.

In addition, the bank’s reputation has been damaged by events that demanded the resignation of its chairman and chief executive, in December.

Last month, shares in the bank plummeted when it emerged that chairman, Sean Fitzpatrick, had temporarily transferred loans of €87 million with Anglo Irish to another bank, before the group’s financial year end.

Similar transfers occurred over the past eight years, meaning that the loans did not appear in the group’s annual accounts during the period.

Mr Fitzpatrick claimed the loans were made to him on a commercial basis and while the bank is adamant that its chairman did not breach banking or legal regulations, it has admitted he acted inappropriately.

The Irish government has reassured the customers that the bank will continue to function as a going concern.

Trading in Anglo Irish shares has been suspended today and a compensation scheme for shareholders is being drawn up.