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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)

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