€8bn of society’s loans to be shifted

UNDER yesterday’s NAMA proposals, as much as €8 billion of the Irish Nationwide Building Society’s (INBS) €10.5bn loan book will be acquired by the Government’s so-called bad bank project.

At the end of last year, INBS said that just more than 11% of its total loan book was made up of impaired or bad loans — those which are/were unlikely to be paid back. In monetary terms, this amounted to approximately €1.16bn. It said that of the remainder, some €7.5bn worth of loans, were of “satisfactory risk”, while €1.82bn worth were of borderline risk value.

Finance Minister Brian Lenihan said yesterday that 40% of the combined loans of all six relevant banks (AIB, Bank of Ireland, Anglo Irish Bank, the EBS Building Society and Irish Nationwide) were actually producing cash flow and that these would be used to cover interest payments on the bonds NAMA is to issue to the banks.