Minister's Statement Regarding Anglo Irish Bank
January 16 2009 - 2:00AM
UK Regulatory
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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