Sunday 17 December 2017

Irish Nationwide eyes wind-down option as bailout bill takes toll

Irish Nationwide: reviewing options. Photo: Niall Carson/PA Wire
Irish Nationwide: reviewing options. Photo: Niall Carson/PA Wire


Irish Nationwide is looking into the costs of winding down the group, merging with another institution and reinventing the society as a viable lender as part of an EU state-aid restructuring plan.

Chief executive Gerry McGinn said the group has hired experts from the German and UK offices of consultants KPMG to advise on the plan, which must be submitted to Brussels by the end of June.

The society's merger talks with EBS, which began late last year, have been put on ice as the new management team concentrates on the plan for Europe. "We need to look at options including a wind down, a merger, or whether there is a viable business here that can play a part in providing choice in the market," said Mr McGinn.

Financial market observers see little chance of Irish Nationwide outlining a credible plan to re-establish itself as a standalone lender, as it will be unable to remunerate the State properly for the €2.7bn bailout it has received. The society will be left with a €2bn-plus retail mortgage book and deposits of €5.3bn after NAMA takes control of its entire commercial property loan portfolio.

Mr McGinn said that the society's comparatively large deposit base, after most of its loans are extracted, will make this part attractive to a potential buyer.

He conceded, however, the society has not had conversations with interested parties beyond EBS, headed by chief executive Fergus Murphy.

EBS, too, has to submit a restructuring plan to the European Commission, as it will receive a €875m capital injection from the Government as the NAMA process blows a large hole in its reserves.

Irish Independent

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