ANGLO IRISH Bank and Irish Nationwide Building Society will submit a joint restructuring plan to the European Commission proposing the merger and run down of the troubled lenders over time.
Senior executives from the two nationalised institutions met Department of Finance and National Treasury Management Agency officials yesterday to prepare the restructuring plan.
A joint plan to move the rump of Irish Nationwide into the remains of Anglo, after both complete their loan transfers to the National Asset Management Agency, must be submitted to Brussels by the end of January under the EU-IMF rescue package agreed with the Government.
Following yesterday’s meeting, a team comprised of executives from the lenders and officials from the department and the NTMA, set up to manage the project, will meet in the coming days to advance plans.
The plan covers issues such as how to transfer deposits at Anglo, which stand at about €14 billion, and about €4 billion in deposits at Irish Nationwide, elsewhere within the banking system. The future of the building society’s 50 branches is also under discussion.
An assessment of the staffing requirements of the merged entity will be examined in detail. Anglo employs about 1,300 staff and Irish Nationwide about 400.
A spokesman for the department said he could not immediately comment. An NTMA spokesman had no comment to make. Neither Anglo nor Irish Nationwide had a comment. Among the other areas under discussion is how to handle the bonds issued by Nama in return for the purchase of loans totalling about €43 billion from the two institutions. Both have large deposit bases in their subsidiaries in the Isle of Man which are also subject to detailed planning.
Taoiseach Brian Cowen said a plan for Anglo would be submitted to the commission by the end of January. Central Bank governor Patrick Honohan has said Anglo’s nameplate would be removed in weeks and the bank closed over a “multi-year” period.
Mr Cowen said Anglo’s deposits would be transferred out of the bank but would remain within the State and that its loans would be wound down over several years.
“Finding a safe location of those deposits within the State is obviously something that can be done quite quickly, by the end of January 2011,” he said. “All deposits held by Anglo Irish Bank are safe.”
The Government has said that the restructuring of Anglo and Irish Nationwide would be completed “swiftly”.
Anglo will have about €38 billion of loans following the transfer of €35 billion in property and associated loans to Nama.
Irish Nationwide will be left with €2 billion in residential mortgages after moving €8.5 billion to the agency.
This will be the fourth restructuring plan for Anglo submitted to the commission for approval but the first to be presented jointly with another financial institution.
In another development, Anglo yesterday offered to buy back about $400 million of covered bonds denominated in euro and yen, paying face value for the debt.
