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January 16, 2009    

Irish Government takes full ownership of Anglo Irish Bank

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by Kay Murchie

Anglo Irish Bank has been nationalised to prevent the bank from collapse.

The Irish Government said under the circumstances, nationalisation was the only option. If it had been declared insolvent, the Government would have been left with approximately €100 billion of liabilities after guaranteeing all deposits in Irish banks last year.

The funding position at Anglo Irish Bank, which is the country’s third largest lender, has weakened and confidence in the bank has plummeted since the resignations of chairman, Sean Fitzpatrick, and chief executive, David Drumm.

Sean Fitzpatrick resigned just before Christmas in a controversy over inappropriate loans to directors totalling €87 million. David Drumm resigned just 24 hours after Mr Fitzpatrick.

The Government said that jobs were safeguarded following the nationalisation and that shareholder rights would be protected and the bank will continue to operate as normal.

The board of Anglo Irish said it will work with the Government to ensure the bank’s long-term commercial viability.

Irish banks have been hit by the global credit crunch and, in particular, the slump in the country’s property market. This has resulted in a fall in the value of investments linked to the property market.

Meanwhile, recent figures show that half the money saved with Anglo Irish came from UK customers.

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Tags: , David Drumm, , Irish Government, , Sean Fitzpatrick


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