Finance got early word banks would pass EU stress test
THE Department of Finance knew that Ireland's two biggest banks passed a recent EU-wide stress test several days before the results were released to the market.
Documents released under the Freedom of Information Act show a draft press release claiming both banks passed the tests was drawn up on July 20, ahead of the results' release on July 23.
The documents explain why the Government remained calm in the face of mounting international speculation that AIB and Bank of Ireland were set to fail.
The records also show a particularly pointed report by Deutsche Bank, which claimed AIB and Bank of Ireland were "unlikely" to pass the tests, was sent around the Department of Finance the day it was published in Irish newspapers.
The Department of Finance noted the Deutsche Bank report had been forwarded internally but refused to release the actual correspondence claiming the information had been "obtained in confidence" and was "commercially sensitive".
The files are among a flurry of communication around the stress tests, with 120 written records generated between July 1 and the end of the month.
The bulk of the records, including correspondence with other finance ministries and briefing notes for ministers, was not released, with the department citing potential damage to international relations as a reason for its refusal.
Both AIB and Bank of Ireland ultimately passed the tests, though their scores were among the bottom of the class.
Meanwhile, a Polish newspaper said that BNP Paribas, France's biggest bank, was offering to pay "the most aggressive" price for a controlling stake in Bank Zachodni WBK, the Polish unit being sold by AIB.
AIB is seeking from 210 zloty (€53) to 215 zloty (€54.5) per Zachodni share, the 'Rzeczpospolita' newspaper said, citing a person close to the deal.
PKO Bank Polski, Poland's biggest lender, is probably ready to pay less than AIB expects and its offer is lower than that of another bidder, Spain's Banco Santander, according to the newspaper. An announcement of the fate of the stake is expected later this week.