‘No more capital needed’ for banks

NO further capital injections by the State are necessary in Anglo Irish Bank and Irish Nationwide Building Society (INBS), the Central Bank has said.

The country’s two “wind-down” banks, which will be merged in the coming months, did not form part of the Central Bank’s stress tests in early April.

Finance Minister Michael Noonan said at the time that there was no immediate need for additional capital to be pumped into either institution.

Anglo chief executive Mike Aynsley agreed — on the same day his bank reported the largest annual losses in Irish corporate history.

Less than a fortnight ago, the chief financial officer of INBS, John McGloughlin, speaking as the institute reported losses of €3.3 billion for last year, said he was confident that “it won’t be necessary for the Government to write another cheque”.

To date, Anglo has received €29.3bn in taxpayer-sponsored bailouts, with INBS receiving €5.4bn.

Independent stress tests of the two financial institutions have been carried out by BlackRock Solutions and Boston Consulting, whose results tallied with the Central Bank’s own previous assessments of the two banks, carried out last September.

“The assessment has concluded that the loan loss forecasts, which were estimated for the capital calculation of INBS last September, remain robust,” the Central Bank said.

Regarding Anglo, it added: “The conclusion of this work is that the previous results remain reasonable and within the ranges BlackRock derived from its analysis.”

Further clarity on the merger of Anglo and INBS is expected next month. All that has been said on the matter to date is that it is being done “in a timely and orderly manner”.

INBS’ branch network has recently been closed and its deposit book moved to Irish Life & Permanent, while Anglo’s deposit book has been transferred to AIB.