Anglo Irish Bank has received a Direction Order from Ireland’s High Court, marking the beginning of its break-up.
The bank will begin transferring its deposits and assets to a third-party financial institution in a restructuring process agreed under the terms of the EU/IMF Programme of Financial Support for Ireland.
The country’s National Treasury Management Agency will immediately begin an auction process, inviting tenders for Anglo’s deposits, while the group’s loan book will be prepared for an orderly work out, aimed at minimising losses.
The process also involves the amalgamation of Anglo and Irish Nationwide Building Society into a merged entity regulated by the Central Bank of Ireland, subject to EC approval.
No action is required by depositors and any transfer of deposits will be subject to existing terms and conditions.
Depositors will also continue to have full access to their funds during and after the auction process.
Commenting on the Direction Order, Anglo’s chief executive officer, Mike Aynsley, says: “It is a necessary step in enabling the possibility of a wider restructure of the banking sector to happen.”
According to a Reuter’s report, Anglo Irish expects to post a loss of €17.6 billion for 2010.