Anglo’s long-term status questioned

FINANCIAL commentators yesterday expressed doubts over claims from Government that Anglo Irish Bank could be kept operating as a long-term going concern.

The bank’s shareholders were told at yesterday’s extraordinary general meeting by Anglo’s chairman Donal O’Connor that it was conceivable the bank could return to the status of a publicly-quoted company sometime in the future.

The Government has stated that the bank, in the near-term, can remain as a going concern.

Eamonn Hughes, an analyst with Goodbody Stockbrokers, yesterday doubted this outlook. “It is unlikely that the Government wants to be operating a banking licence indefinitely. So, over time, we suspect the objective will be to wind down the franchise,” he said.

“In the medium term, this will remove one of the major players in the domestic commercial property sphere — ensuring market share gains for the remaining players. Given that a commercial property portfolio is more relationship-led than a simple mortgage portfolio, this winding down process may also see one of the other banks with an operational role in this process on an arms-length transaction basis,” he added.

In its reading on the Anglo issue, Bloxham Stockbrokers said: “Market attention will turn toward AIB and Bank of Ireland to derive indications of any ripple effect as the Anglo nationalisation is digested by the market. One implication is that Anglo Irish Bank could become the ‘bad bank’ in the good/bad model, and is used to place seriously troubled banking assets from the rest of the sector.”

Emer Lang at Davy Stockbrokers said the pending nationalisation of Anglo — barring any competition concerns from the European Commission, which is looking at the case — could “serve as a template for a ‘bad bank’.”