No guarantee that Anglo will be restructured by end of the year
Published 12/11/2010 | 05:00
THE Department of Finance has admitted that Anglo Irish Bank's long-awaited restructuring may not be completed by the end of the year.
The news comes two months after the Government anno-unced plans to split Anglo into a savings institution and an asset recovery division that will run off the bank's loan book.
At the time, the Government stressed its desire to bring Anglo's fate to a swift conclusion and bank boss Mike Aynsley said he expected the restructuring to take place by the end of the year.
A spokesman for the Department of Finance last night confirmed that the split "may not happen on January 1", but stressed that it would take place "as soon as feasible".
Anglo's revised business plan was only submitted to the European Commission in the last week of October, prompting some to speculate that an approval may not arrive this side of Christmas.
Sources in Brussels said that a pre-Christmas approval had not been ruled out, while the Department of Finance said the Commission was "working with all speed" to process the plan.
"The plan is obviously complex and the Commission has sought to clarify certain issues with the bank and the authorities," the Department of Finance added in a statement.
"The Commission will make a decision based on its own assessment and we do not have control over their processes."
A spokeswoman for the Competition Commissioner Joaquin Almunia (above) confirmed that the final Anglo plan had been received, but said she couldn't guide on when a decision will be announced.
"It may be that the split may not happen on January 1 given that even if there is a decision by the commission there will be a number of operational issues to be finalised," the Department of Finance said.
"However, the split will take place as soon as feasible."
The situation leaves Anglo employees in limbo, as it is unclear what impact the split will have on their jobs. A key determinant will be the level of shared services allowed between the savings bank and asset recovery bank.
As well as examining how "separate" the two institutions should be, the Commission is also looking at whether the savings bank will be allowed to attract new deposits and compete aggressively on interest rates.
While there are a number of issues to be worked through, it is understood that no major stumbling blocks have emerged, reflecting Europe's initial welcoming of the split plan.
The plan only emerged after the Commission expressed serious concerns about proposals to split Anglo into a "bad bank", to run down Anglo's toxic loans, and a "good bank" that would house performing loans and savings, and be allowed to carry out new lending.
The Commission is also weighing up restructuring plans for Irish Nationwide and EBS. Mr Almunia's spokeswoman said there was "no update" on those plans.
In September, Mr Almunia said the Commission was "in the process of finalising its assessment" of EBS and would examine Nationwide's plan once it had gotten details of the building society's future capital needs.