All six Irish-owned banks sign up to state guarantee scheme

IRISH banks have all now decided whether or not to join the Government’s two-year guarantee scheme for vulnerable financial firms.

Ireland initially offered to guarantee €400 billion in liabilities of six Irish-owned institutions, while the European Commission later approved an extended €485bn scheme to include foreign-owned banks with significant Irish operations.

All six Irish banks signed up for the scheme.

However, participation comes with restrictions over dividend payout and executive pay, and was snubbed by other banks with financial support from elsewhere.

Irish-owned banks — Allied Irish Banks, Anglo Irish Bank, Bank of Ireland, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society — have all joined the scheme.

Of the foreign-owned banks, Postbank, a joint venture between Belgium’s Fortis and the Irish post office has opted in.

Ulster Bank, owned by Royal Bank of Scotland, said this week it would rely instead on its parent group’s dependence on a similar scheme created by the British government.

Fellow Scottish bank, HBOS’s Irish unit said its involvement was not in its customers’ interest.

National Irish Bank, a unit of Danske Bank has declined as it is covered by Denmark’s scheme, and the Irish unit of Belgium’s KBC bank also rejected the scheme.