Following the announcement yesterday by the European Commission, of the approval of the restructuring plans of Anglo Irish Bank (“Anglo”) and Irish Nationwide Building Society (INBS), the Irish Department of Finance has today announced that INBS’s assets and liabilities will be transferred to Anglo and the new entity is to have a new name. The DoF announcement doesn’t actually mention the new entity’s name but the press reports that it is to be the Irish Banking Resolution Corporation or IBRC. This merged entity has so far cost the Irish taxpayer €34.7bn and may cost more as the €40bn-odd of loans in the merged entity are worked out over the next number of years. IBRC doesn’t hold deposits and will be providing no new lending save in pursuance of existing loan agreements.
We may be waiting some time to see the detail of the full European Commission decision but you might wryly smile at the claim in the press release that the restructured entity has appropriately burden-shared with stakeholders.
(Graphic above produced by Japlandic.com, with other examples of artwork available here)
UPDATE: 15th October, 2011. The BBC reports that the new entity, IBRC, is now a reality following the merger of Anglo and INBS. A statement from the newly-named old entity states “with effect from 14 October 2011, the name of Anglo Irish Bank Corporation Limited has been changed to Irish Bank Resolution Corporation Limited (trading as IBRC). IBRC is an asset recovery bank which is committed to working out the Bank’s operations over time in accordance with directions given to the Bank consistent with our EC approved restructuring plan. The objectives of Bank’s Board and senior management team is to run the Bank in the public interest and in a manner that maximises return to our Shareholder and the Irish state whilst also treating customers and creditors fairly.” Despite the new name, the fact that it is a bank in name only, the Irish state will continue to repay €3.5bn approximately of senior unsecured unguaranteed bonds in the merged unit, one of the most significant of which is the USD 1bn (€721m) bond repayable on 2nd November, 2011.