Banks unlikely to repay money on time

THE new head of the National Treasury Management Agency (NTMA), John Corrigan, has said the first repayments due from the banks, related to the Government’s €7 billion recapitalisation, will not be made on time.

Technically, the first coupons are supposed to be paid later this month and in May. Bank of Ireland is due to pay €280m by February 20, with AIB due to pay the same amount by May 13. However, given the terms of both banks’ ongoing restructuring talks with the European Union, both companies are currently blocked from paying coupons on certain securities until their viability plans are finalised.

Non-payment of the coupons would result in the Government being reimbursed to the same value via ordinary shares in the banks. Mr Corrigan told yesterday’s sitting of the Public Accounts Committee (PAC), in the Dáil, the agency will collect either cash or the equivalent value in shares.