Sunday 21 July 2019

BoI completes transfer of €1.9bn in loans to NAMA

AIB and Anglo to pass on toxic debts to asset agency in the coming weeks

Joe Brennan

Bank of Ireland has completed the transfer of the first €1.9bn of loans it is moving over to the National Asset Management Agency (NAMA).

The agency has now taken over the first batch of loans from building societies Irish Nationwide and EBS, and plans to have initial transfers from the remaining NAMA participants -- Anglo Irish Bank and Allied Irish Banks -- compl- eted within the coming weeks.

NAMA revealed on Tuesday it has applied an average 47pc discount to the first €16bn of loans it has taken control of.

Broken down by lender, it has shaved 43pc off the first €3.3bn of AIB loans, 50pc off Anglo's initial €10bn and 35pc of BoI's first €1.93bn.

In addition, it has sliced 58pc off Irish Nationwide's first €670m of loans and 37pc off EBS's €140m.

"The agency expects to complete the transfer of the remaining loans from all five institutions by the end of the year and no later than the end of February 2010, the deadline set by the EU Commission," it said yesterday.

Meanwhile, ratings agency Fitch welcomed Finance Minister Brian Lenihan's move this week to hammer out what capital each of the banks needs to raise to cope with NAMA discounts, future losses on their remaining loans, and higher reserve requirements set by the regulator.

"The capital position of these five institutions is now clearer and any lingering doubts about the willingness of the Irish State to support its leading credit institutions should have been removed," said Matthew Taylor, a senior analyst with Fitch.

He also noted that the new shape of the two largest institutions is becoming more apparent.

Foreign assets

AIB committed this week to flogging foreign assets before going cap-in-hand to shareholders for equity.

Still, at the end of the process, the Government still expects to end up converting some or all of its preference shares in AIB into ordinary stock -- potentially giving it a majority holding.

BoI's plans are understood to be along the lines of converting some subordinated bonds into equity, hitting the market with a €1.5bn rights issue and converting up to €1bn of the Government's investment into ordinary stock.

It is expected that the bank will clearly outline its capital-raising plans in the coming weeks, as Brussels gets back on BoI's state-aid restructuring plan.

"Major challenges remain but once the proposed capital raising has been completed, the prospects for the sector should be on a surer footing," said Mr Taylor.

Irish Independent

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