Quick Anglo wind-down would cost at least €40bn

THE cost of winding down Anglo Irish Bank, over a 12-month period, would amount to at least €40 billion, a Dáil Committee has heard.

That would mean that on top of the €22bn of Government/taxpayer money already earmarked for the loss-making bank, another €20bn would be needed to close it permanently.

The estimate came from the bank’s chief financial officer, Maarten Van Eden, in response to a question from the Joint Oireachtas Committee on Finance and Public Service, yesterday and effectively backs up the Government’s previous claims that a wind-down of the bank would be too costly.

Anglo representatives – also including chief executive, Mike Aynsley and non-executive chairman, Alan Dukes – told the committee that they had looked at all options for the bank’s future.

These options include its liquidation and winding down over 10 or 20-year periods.

However, they remained hopeful that the European Commission would sanction their preferred option of splitting the business into an asset management division to manage its remaining non-NAMA-bound bad loans and a small new bank, aimed at making profits.

The “split” option has previously been welcomed by the Financial Regulator, Matthew Elderfield; and – according to Mr Dukes – is the only scenario where some money can be recouped from the Anglo meltdown. “Winding down, over whatever timeframe, means a loss all the way and funding requirement all the way,” he added.

Of the €35bn, or so, that is due to be left in Anglo after all of its NAMA transactions are completed, €15bn will go into its new “clean bank” operation with the remaining €20bn in bad assets wound down in its asset management arm.

Mr Aynsley admitted to the committee the €22bn of Government capital being pumped into Anglo has gone and won’t be seen again.

With regard to outstanding debts, Mr Dukes said that the bank’s new management would “recover as much as we possibly can from everyone”, without going into individual high profile cases.

Mr Aynsley added that management is “determined to pursue those who owe us money, for every red cent”.

Anglo bosses later told a meeting of Fianna Fáil TDs that winding down the bank in the short term would cost the state €102bn.

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