Brokers positive on bank rescue plan

REACTION to the proposed government rescue package of an insurance scheme and the injection of up €4 billion in each of the two main banks has been broadly positive from the stockbroking fraternity.

The combined €8bn reduces the risk of a highly dilutive rights issue and of the state becoming the big stakeholder in both AIB and BoI, said NCB Stockbrokers.

“The devil will be in the detail,” adding that an attractively priced insurance scheme to cover bad debts of up to €24bn — €13.5bn at AIB and close to €10.5bn at Bank of Ireland, plus the substantial equity injection, should help stabilise the Irish banks.