Ireland to hike bank stakes
THE Irish government could end up with a majority stake in several banks after the implementation of a state-run National Asset Management Agency (Nama) to house €90bn (£55.7bn) of the sector’s bad debts, finance minister Brian Lenihan said yesterday.
“As I have already noted, some institutions may need capital after they have transferred loans to Nama,” Lenihan told a parliamentary committee.
“This will increase the state’s ownership in these banks and in some cases that may result in a majority shareholding but I believe this is a more discriminate and effective policy than blanket nationalisation.”
However, several analysts suggested yesterday that Bank of Ireland and Allied Irish Banks, each of which are 25 per cent state-owned, might be allowed to launch rights issues to avoid falling further into government hands.
Lenihan also said that the Irish property crash was “approaching the trough”, following a warning from the European Central Bank not to pay too much for property loans likely to be transferred into Nama.
“We really do need to banish our devils… this suggestion that we have further to go down and further and further and further,” Lenihan said.
“The property yield is at an all-time high relative to the assets, which is a clear, objective economic indicator that we are approaching the trough.”
Lenihan’s plans to rescue the former Celtic Tiger’s banks have attracted criticism from the opposition Fine Gael party, which prefers a “good bank, bad bank” solution to a wholesale transfer of toxic assets into Nama.