Thursday, 17 June 2010
Dáil Éireann Debate
Minister for Finance (Deputy Brian Lenihan): On 30 March, the Financial Regulator outlined the new capital requirements for all Irish banks and I made a full statement on the capital needs of the covered institutions. The plans outlined in that statement are currently being implemented.
The Government has provided capital to five banks since the start of 2009 and I will outline these injections by individual institution below. In February 2009, both AIB and Bank of Ireland were recapitalised with €3.5bn each. The funds were provided by a purchase of Preference Shares (Tier 1) by the National Pensions Reserve Fund Commission.
Bank of Ireland has recently completed a capital raising exercise which encompassed a debt-for-equity swap, a placing with institutional shareholders, a conversion of the Government’s preference shares and a rights issue. In all, €3.42bn was raised, €1.76bn was raised from the private sector and €1.66bn by converting that amount of the preference shares. In addition, the NPRFC has received €543m in fees and payments for the warrants and the interest rate on the remaining preference shares has risen from 8% to 10.25%.
The Government nationalised Anglo Irish Bank in January 2009 and has to date put in capital totalling €14.3bn. This comprises a direct capital injection of €4bn and €10.3bn by way of a promissory note payable over ten to fifteen years.
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