European Commission approves €3.8bn aid to nationalise Irish Life & Permanent

STATE aid of €3.8 billion that will make the Irish Life & Permanent Group Holdings the fifth banking institution to be nationalised has been approved by the European Commission.

While shareholders rejected the recapitalisation that would wipe out their interest at an extraordinary general meeting, Finance Minister Michael Noonan is expected to exercise his power and enforce it. Brussels rushed out the temporary approval yesterday that would give the state a 99% stake in IL&P, in time for the Dublin meeting.

The prudential capital assessment review of the Irish banks in March identified that the bank needed €3.6bn in Core Tier 1 capital and €0.4bn in contingent capital. The state is to purchase ordinary shares in IL&P for €2.3bn and contingent capital notes for €.04bn by July 31.