herald

Tuesday 12 November 2019

Tiny Nationwide costs us in a whopping €5.4bn bill

FORMER Michael Fingletonled Irish Nationwide needs yet another €2.7bn in capital, it was revealed.

The building society now needs €5.4bn in total funding to survive.

The additional costs for Anglo Irish and Irish Nationwide will push Ireland's debt to GDP ratio to nearly 99pc this year.

Finance Minister Brian Lenihan has admitted the banking bailout figures released this morning are “horrendous”, but said that they bring 'closure' to the matter.

Mr Lenihan said the building society is under public control and he has asked his advisers to bring a “finality” to selling off or merging the bank.

The bank has a staggering loan book of between €10bn to €12bn.

The Government outlined that it is expected to double its capital already provided.

Clarity

Mr Lenihan said that the capital support of €5.4bn should be final amount required.

“I have accepted the NTMA's recommendation in order to establish a ceiling on the level of support provided to the society consistent with the objective of providing final clarity on the public support required by the Irish banking system,” he said.

On March 30, Mr Lenihan announced that INBS did not have a future as an independent stand-alone entity.

“The institution is now under public control and arrangements for its sale or integration into another institution are being advanced in discussions between the State, the European Commission and the Society,” he said.

“I have asked the NTMA and my other advisers to explore options for the society and to bring finality to the position.”

The management in INBS was replaced in 2009 when former chief executive Michael Fingleton stepped down.

The Sligo man joined the building society in 1971 and was widely known as a man who knew how to charm and to charge.

He associated with many of the country's most powerful people, including politicians.

From 1969 he spent a couple of years organising food supplies to the Republic of Biafra in south-eastern Nigeria before becoming chairman of the Concern organisation.

But when he moved to Irish Nationwide he would remain in the same job until he retired in disgrace in April 2009.

“This further capital investment by the State will reassure depositors in the institution that all deposits remain secure,” Mr Lenihan said.

“I propose to inject this capital, subject to European Commission approval, through an increase of the promissory note so as to spread the cash requirements over the coming years.”

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