Thursday 8 December 2016

Mystery investor waits in the wings

Chief executive: Fergus Murphy
Capital required: €875m
Loans going to NAMA: about €900m
Discount on first NAMA loans: 37pc

Published 31/03/2010 | 05:00

AN outside institution is interested in taking a stake in state-controlled EBS, Finance Minister Brian Lenihan revealed yesterday.

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The unnamed organisation could take a stake in the building society which burnt its fingers when it began lending to developers in the latter part of the decade.

The building society will now transfer about €140m of assets to NAMA this week, or almost one-seventh of its €1bn loans it plans to hand over to the agency. The society had the lowest discount among the lenders transferring loans to NAMA.

Its rival, Irish Nationwide, had the highest.

Mr Lenihan made no mention yesterday of the so-called third force in Irish banking -- a proposed merger between the EBS and other small lenders.

Instead, the minister said he wanted to ensure the residential mortgage sector in Ireland remained competitive with "an appropriate number of participants in the market" to meet future demand.

The society, which has not yet received a cent from the State, will need an €875m injection to meet the regulator's demand that lenders bolster their reserves.

That injection may come from the mysterious investor or the taxpayer.

The lender said in a statement yesterday it would seek to reduce the burden to the State "through a range of programmes and strategies".

In the meantime, the State will provide EBS with €100m to tide the society over until a firm decision is made on the future.

This will give the State "extensive powers and full economic ownership of EBS", Mr Lenihan said.

Irish Independent

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