Business Irish

Sunday 18 March 2018

Potential EBS investors wanted banking licence

Joe Brennan

Two high-flying corporate financers, who emerged over the weekend as potential investors in EBS, looked into applying for a banking licence late last year, according to well-placed industry sources.

Nigel McDermott and Nick Corcoran of Dublin-based Cardinal Asset Management are understood to have told EBS they had a group of international investors who would be willing to take a substantial minority stake in the society.

The duo are no strangers to the sector, having spearheaded tentative attempts to take control of both Bank of Ireland and Anglo Irish Bank over the past 18 months.

They were backed at the time by oil-rich Middle Eastern funds and private equity firms JC Flowers and Carlyle.

Mr McDermott, a former associate of billionaire Dermot Desmond, and Mr Corcoran investigated the possibility of getting hold of a banking licence last year. A banking licence would have given them greater flexibility in terms of the types of deals they could chase in the sector at a time when the financial industry was in a state of flux.

Sources said the pair were "agnostic" at the time as to whether they would look to carry off deals in Ireland or elsewhere in Europe.

But the approach to EBS has prompted speculation in financial circles that they are looking to have a stake in a regulated institution as a way of driving consolidation among the country's smaller lenders.


The Government would be keen to see Cardinal come up with a credible proposal, having circled the sector for 18 months.

EBS has been in formal talks since late last year to take over deeply troubled Irish Nationwide, which will be left with a €2bn mortgage book and about €5bn of deposits after NAMA takes over its €8.5bn commercial loan book. The State will be responsible for covering €2.6bn of losses that will be triggered by the NAMA transfer.

Meanwhile, Irish Life & Permanent (IL&P) is investigating the possibility of putting in a bid for Nationwide in order to ensure its weak bank, Permanent TSB, is well placed to participate in a 'third force' deal.

Up until now, IL&P had been waiting on the sidelines for a merger to be completed between EBS and Irish Nationwide in the first instance.

However, the bancassurer, the only Irish lender not to participate in NAMA or require a bailout, is understood to have been concerned that it could be left out as the Government prioritises banks and building societies it has rescued.

Irish Independent

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