EU to probe EBS restructuring plan

The European Commission has opened an in-depth investigation into the proposed restructuring of Educational Building Society (EBS), it was announced today.

The probe is to be carried out under EU state aid rules to examine how EBS benefitted from state support in various forms, the European Commission said.

"At this stage, the Commission has doubts whether the distortions of competition caused by the aid are sufficiently addressed in the restructuring plan," the statement said.

"The amount of aid received by EBS… justifies that we give interested third parties the opportunity to comment on whether the distortions of competition are adequately addressed," said Joaquin Almunia, Commission Vice-President in charge of competition policy.

The Commission in June temporarily authorised a €875m capital injection ifor EBS, Ireland's largest building society.

The recapitalisation resulted in the nationalisation of the financial institution, which has also received aid through asset purchases by the National Asset Management Agency (NAMA) as well as coverage under the bank guarantee schemes.

A restructuring plan for EBS was submitted to the Commission on May 31, with the Government in the interim having indicated that they are preparing to sell the Society.

The Department of Finance said the European investigation won't slow down the sale of the lender - and the Government is expected to narrow down the number of bidders for EBS in the coming days.