€12bn of loans under €20m will not be transferred to NAMA

ALLIED Irish Banks and Bank of Ireland will not transfer 12 billion worth of loans directly to the country’s “bad bank” as agreed under an EU/IMF deal, a Department of Finance spokeswoman said yesterday.

Under an €85bn bailout agreed late last year Ireland had agreed to extend its purge of risky commercial property loans from lenders to include land and development loans valued at under €20 million from its two main banks.

The banks will instead run the loans, with a book value of €12bn, down themselves as part of a huge sector-wide deleveraging process announced last week aimed at trimming lenders down to size and easing them off emergency ECB funding.