Tuesday 24 April 2018

Anglo executives to take majority of top positions in merged entity

Emmet Oliver

Anglo Irish Bank executives are expected to take the majority of the leadership roles in the new Anglo-Irish Nationwide merged entity, which is due to be created later this year.

Meanwhile, the governor of the Central Bank, Dr Patrick Honohan, has said it is too early to predict when Ireland might return to the capital markets.

With a non-NAMA loan book of €36bn, Anglo will effectively be taking over Irish Nationwide, which is expected to see Anglo chief executive Mike Aynsley installed as CEO, sources have said.

The board of the new entity is also not expected to have an equal number of Anglo and Irish Nationwide directors, but instead will have mainly Anglo directors and public interest directors appointed by Finance Minister Michael Noonan.

Anglo yesterday submitted a restructuring plan to the National Treasury Management Agency, including plans to sell its wealth management division, close foreign offices and slash costs, with 300 jobs to go initially from the merger.

No new lending will be done by either entity and Irish Nationwide's branch network will be radically cut back.

It comes as the stress tests of the Irish banks continue to gain credence with market players.

Bill O'Neill, chief investment officer for Merrill Lynch wealth management (Europe), said there was a "relief rally" in Irish government bonds.

He said this reflected the view that "most of the horror around required bank recapitalisations are out in the open".

"The recent stress tests have credibility. The easing in ECB collateral requirements also eases pressure for a fire sale of bank loans. So, risk premium on Irish gilts was perceived as unjustifiably high," he said.

However, he added: "The problem is the issue of Ireland's sovereign debt's sustainability remains a huge cloud overhanging the market."

Meanwhile, Mr Honohan said it was too early to say when the country would be able to return to the markets. He said no ECB long-term funding deal was likely for now.

"We just have to wait and see that the rest of the environment recovers in such a way that these spreads come down much more rapidly and that the Government can easily get back into the market at realistic and reasonable interest rates."

He also said that "the more that is done, the sooner we get into the market".

Irish Independent

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