TWO bidders are interested in snapping up the savings arm of embattled Irish Nationwide, the Irish Independent has learned.
But the move is unlikely to save many of the 400 jobs at risk in Irish Nationwide, since both potential new owners would slot the savings business into their existing operations.
The development comes after it emerged the European Commission is poised to pull the plug on Irish Nationwide after deciding the society has no viable future.
Led by disgraced banker Michael Fingleton, Irish Nationwide racked up billions of losses despite its tiny scale, prompting the State to step in with a €2.7bn bailout earlier this year.
Weekend reports suggest the building society is being primed for an Anglo Irish Bank-style solution, which would see it divided up into a new savings bank and an "asset recovery division" that would collect repayments on remaining loans.
However, the Irish Independent has learned there is significant commercial interest in acquiring the €4bn deposit book of Irish Nationwide amongst the bidders for EBS.
That field of bidders is led by Irish Life & Permanent and a consortium including international investment group Cardinal Capital. Sources close to Irish Life & Permanent (IL&P) last night confirmed the bancassurer would be interested in buying the Irish Nationwide deposit book even if its bid for EBS fails.
IL&P wants to set up a dedicated banking arm including Permanent TSB, which it already owns, EBS and the Irish Nationwide deposit book.
Sources close to the Cardinal consortium said it would "absolutely" be interested in buying the Irish Nationwide deposit book if it is successful in buying EBS. The relatively small size of Irish Nationwide's deposit wing means Cardinal would only be interested in buying it if it can attach it to something "chunky" like EBS.
Irish Nationwide is transferring 80pc of its €10bn loan book to the National Asset Management Agency (Nama), leaving the society with just €2bn mortgages on its lending book.
Sources last night said the Government always planned for Irish Nationwide to be shut down, given the depth of the society's problems and its relatively small scale.
The remaining €2bn mortgage book may be run down using an independent "asset recovery division" that would accept repayments but could carry out no new lending. Commercial solutions may also be explored, potentially out-sourcing the loan collections to a third party if the loan book itself can't be sold.
Job protection for Irish Nationwide's 400 staff is likely to be best if the society is split into a savings bank and an asset recovery unit, without any third-party intervention.
That option is likely to be the most costly for the taxpayer, since it would be more efficient to handle Irish Nationwide's relatively small book as part of a bigger bank.
The European Commission is expected to signal Irish Nationwide's wind-down over the coming weeks after mulling over restructuring plans put forward by the society's management.
"We have not received any indication of the likely outcome (of the European deliberations), therefore we cannot comment further at this stage," a spokeswoman for the building society said.