🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

UPDATE 1-Ireland likely to take further stakes in banks

Published 04/24/2009, 09:04 AM
Updated 04/24/2009, 09:08 AM

* Govt likely to have to inject more capital

* UK-based property JV reported interested in Irish loans

(Recasts with minister's comments, shares)

DUBLIN, April 24 (Reuters) - Ireland is likely to have to inject more capital into Allied Irish Banks and Bank of Ireland as part of its "bad bank" plan to cleanse the sector of soured assets, a government minister said on Friday.

The state already has 25 percent voting rights in Bank of Ireland after a 3.5 billion euro ($4.6 billion) capital injection through preference shares, while Allied Irish investors will next month vote on a similar package.

"We will probably have to go in and recapitalise," Eamon Ryan, the minister for communications, energy and natural resources, said of the country's two largest banks in an interview on local radio.

The government is expected to unveil the broad outline of a new National Asset Management Agency (NAMA), which will take over up to 90 billion euros worth of property loans from the banking sector in the next few weeks.

NAMA will buy the loans at a discount to their book value, forcing the banks to write down the losses and require them to acquire more capital, which could open the door for the state to take a majority stake.

Shares in Bank of Ireland and Allied Irish were up 1.5 percent and 2 percent respectively in early afternoon trade. The shares have dropped around 30 percent since the government said in early April that it may take further stakes in the lenders.

Separately, the Irish Independent newspaper said a joint venture between property firm CB Richard Ellis and London-based REAM Capital Partners had been talking to Irish banks about taking stakes in their commercial property loan books.

REAM Managing Partner Michael Birch told the paper the joint venture had tens of millions of pounds and access to hundreds of millions more, to invest in the Irish banks' loan books.

CB Richard Ellis had previously told Reuters it saw opportunities in Ireland. ($1=.7592 Euro) (Reporting by Andras Gergely and Carmel Crimmins; editing by Simon Jessop, John Stonestreet)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.