Minister's Statement Regarding Anglo Irish Bank


 

TIDMANGL 
 
RNS Number : 7506L 
Irish Department of Finance 
16 January 2009 
 
Minister's Statement regarding Anglo Irish Bank 
 
 
The Government has today decided, having consulted with the Board of Anglo Irish 
Bank Corporation plc ("Anglo"), to take steps that will enable the Bank to be 
taken into public ownership. 
 
 
This decision has been taken after consultation with the Central Bank and the 
Financial Regulator which has confirmed that Anglo Irish Bank remains solvent. 
 
 
Anglo Irish Bank is a major financial institution whose viability is of systemic 
importance to Ireland. Anglo has a balance sheet of some EUR100bn with a 
substantial deposit base which the State is determined to safeguard. The 
Government has made clear that it will ensure its continued viability. Anglo 
Irish Bank will continue to trade normally as a going concern, with appropriate 
Government support as necessary. All Anglo employees remain employed by the 
company. 
 
 
The funding position of the bank has weakened and unacceptable practices that 
took place within it have caused serious reputational damage to the bank at a 
time when overall market sentiment towards it was negative. Accordingly the 
Government believes that the recapitalisation is not now the appropriate and 
effective means to secure its continued viability. Therefore the Government must 
move to the final and decisive step of public ownership. 
 
 
The Government believes that the prospects for the institution are solidly 
underpinned in the new structure, with the benefit of state ownership and a 
renewed management and Board. In the current circumstances the State is the only 
available potential owner. 
 
 
The recently appointed Chairman of the Board, Mr. Donal O'Connor, will stay on 
as Chairman. Anglo will be managed on an arms length basis as a commercial 
entity. A new Board will be appointed having regard to the need for appropriate 
continuity. 
 
 
Shareholder rights will be respected in this process. The relevant legislation 
outlines a process for determining compensation as appropriate. 
 
 
All customers of Anglo Irish Bank can be assured that the full amount of their 
deposits and savings are further safeguarded by this action. They can also be 
assured that they can and should continue transacting with Anglo as normal and 
there is no need for customers to take any steps as a result of this 
announcement. Anglo Irish Bank will communicate directly with all customers in 
the coming days. 
 
 
Information will be available on the websites of Anglo Irish Bank, the Central 
Bank, the Financial Regulator, and the Department of Finance. Customers with 
particular queries may also phone Anglo Irish Bank or the Financial Regulator. 
 
 
Creditors (including bondholders) of Anglo Irish Bank can be assured that it 
will continue to service its obligations and will repay its debts at maturity. 
 
 
The Government has prepared legislation to put this decision into effect. This 
will be presented to the Houses of the Oireachtas on Tuesday. 
 
 
Tomorrow before the markets open, it is expected that the Irish Stock Exchange 
and the UK Listing Authority will announce that Anglo shares will be suspended 
from listing on the Stock Exchanges. 
 
 
The Minister said "I would again stress that this Government decision safeguards 
the interest of the depositors of Anglo, and the stability of the economy, given 
the significance of Anglo in this regard, as already recognised by the European 
Commission. The bank will continue to operate as normal and depositors and 
creditors should continue to transact as normal." 
 
 
Customers of all financial institutions can have confidence that the wider 
financial system in Ireland remains well capitalised and liquid and that the 
Irish authorities will be proactive to ensure that their interests are protected 
and their deposits and debts are secure. 
 
 
The Government will ensure the continued viability of all systemic financial 
institutions. 
 
 
The Government remains fully committed to the recapitalisation proposal already 
announced in relation to AIB and Bank of Ireland. These plans include injection 
of core tier 1 capital in the form of preference shares and underwriting of 
further core tier 1 capital issuance. 
 
 
Ends 
 
 
January 15, 2009 
This announcement has been issued through the Companies Announcement Service of 
the Irish Stock Exchange. 
 
 
 
 
 
 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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