Final Anglo bailout cost set at minimum of €29.3bn

joe316

The Government has today announced a final estimate for the cost of the Anglo Irish Bank bailout of at least €29.3 billion and has said AIB will require an additional €3 billion in funding and Irish Nationwide a further €2.7 billion.

The Anglo figure of €29.3 billion is based on a haircut of 67 per cent on the remaining €19 billion in loans to be transferred into the National Asset Management Agency (Nama) before the end of the year.

The Central Bank said the final cost may rise by another €5 billion to €34.3 billion in the event of unexpected losses, namely if the Nama haircuts to the bank’s loans reaches 70 per cent.

Today’s announcement will bring the cost of the overall State bailout of the banks to €44.7 billion, with the prospect of this rising to €49.7 billion under worst-case scenario losses at Anglo if commercial property prices fall 65 per cent and do not recover for 10 years.

The prospect of the Government taking a majority shareholding and control of AIB, possibly over 90 per cent, is now inevitable. That will bring a fourth financial institution under State control following the bank bailouts.

In a bid to speed up the Nama transfers, the Central Bank has said that the threshold for individual loans at AIB and Bank of Ireland for transfer to the agency will rise from €5 million to €20 million, reducing the amount of loans Nama will be in total by €6.6 billion from about €80 billion.

This, the Minister for Finance Brian Lenihan said, will allow for the completion of all Nama loan transfers by the end of the year.

The Government has already injected €23 billion into Anglo. Some €16 billion of a projected €35 billion in Nama loans have transferred from Anglo in two tranches to date. The average haircut on these first two tranches was 58 per cent.

The announcement for the need for a further €3 billion in capital at AIB is in addition to the €7.4 billion target set in March that it needs to raise this year. AIB’s funding bill is rising due to higher than expected discounts on €23 billion in loans being sold to Nama, which is removing the most toxic loans from the banks.

Following the Central Bank’s announcement, AIB said that the bank’s managing director Colm Doherty would be stepping down before the end of the year and executive chairman Dan O’Connor would leave the bank within the coming weeks.

Bank of Ireland has sufficient capital to meet requirements, while EBS building society, which is up for sale, has been warned it will need to take account of higher haircut levels of up to 60 per cent in its capital planning.

There was no capital assessment of Irish Nationwide, which is still in talks with the Central Bank over its restructuring plans, though Mr Lenihan said that the State bailout of the building society would double to €5.4 billion.

Irish Life and Permanent, which did not lend to property developers and is not transferring any loans to Nama, is unaffected.

Mr Lenihan said today’s final figures for repairing Ireland’s banking system would provide reassurance to investors.

“As has already been signalled, this statement confirms that additional capital support will be required by some of our banks and building societies,” he said. “The overall level of State support to our banking system remains manageable and can be accommodated in the Government's fiscal plans in the coming years.

Central Bank governor Patrick Honohan said: “Taking account of Nama's estimates of future haircuts has implications for required capital injections which need to be acted on now.

"The new calculations give clarity and as much certainty as can reasonably be expected to the budgetary cost of the bank restructuring."

Mr Honohan said the additional budgetary costs - and in particular the higher debt-to-GDP ratio that is implied - "confirm the need for a reprogramming of the budgetary profile, though it is important to recognise that the bulk of this reprogramming need arises from other sources".

He added the latest bailouts take the Irish banking system "closer to a final resolution of its restructuring".

The head of financial regulation at the Central Bank, Matthew Elderfield, said: “We have today confirmed that we are pressing ahead with our plans to require the Irish banks to meet more rigorous capital requirements which are closely aligned with the new international standards set by the Basel Committee and to do so by the year end.

"As part of this process, we have advised the banks that they need to take account of developments in the Nama haircuts which have occurred during the course of the year."

Concerns about the Government’s ability to pay for the banking bailouts have pushed Irish State borrowing costs to record levels.

Referring to a “manageable” plan that would be presented to deal with Anglo, Taoiseach Brian Cowen had said: “We are trying in every way to be transparent and upfront about the quantity of losses so that people in the international community can see that we are doing all we can."

http://www.irishtimes.com/newspaper/breaking/2010/0930/breaking4.html

This makes me so sad, even as a person in a steady job I'm thinking of leaving. I'll be paying for this for the rest of my life.

oooomy

women and children first - switch the lights out on your way out

galwayrush

The top brass in Anglo will obviously be rewarded with another salary increase for their outstanding work and extra work load , Lenihan is very undedstanding when it comes to helping his friends, tough decisions and all that :rolleyes:

galwayrush

joe316 wrote: »

http://www.irishtimes.com/newspaper/breaking/2010/0930/breaking4.html

This makes me so sad, even as a person in a steady job I'm thinking of leaving. I'll be paying for this for the rest of my life.

We're leaving once the kids finish school, they deserve better than anything this country has to offer them for the future.

moonpurple

nationwide is costing the taxpayer 2.7 billions
but michael fingleton (its former ceo) has not returned the 1 million bonus he gave himself..said he would return..then decided

ahm..no i'll keep it

arybvtcw0eolkf

galwayrush wrote: »

We're leaving once the kids finish school, they deserve better than anything this country has to offer them for the future.

+1.

We've spoken about this in the family already.

My son is studying property economic's and my advice is to get the hell out of dodge when he gets his degree.

My daughter is in secondary school and this whole mess is largely escaping her attention, sometimes I feel sorry for her in her innocence of all this.

I'm stuck here, luckily I've a tiny mortage and I'm pretty secure. But I dread what the future holds for my kids should they decide to stay. And honestly I fear for my pensionable years.

And although it wouldn't change things, but why - why fvcking why haven't heads rolled?.

Mister men

Astounding figures. Very worried for my kids future at this stage.

galwayrush

moonpurple wrote: »

nationwide is costing the taxpayer 2.7 billions
but michael fingleton (its former ceo) has not returned the 1 million bonus he gave himself..said he would return..then decided

ahm..no i'll keep it

None of those responsible from Bertie to Seanie Fitz will ever face prosecution, but you and me will do time for not having a TV licence.........:rolleyes:

SeaFields

Yesterday in the Dail, Biffo was pressed on the matter. He would not commit to a figure BUT said that if Anglo costs €30bn then it would cost us €1.5bn in interest per annum...every fcuking year €1.5bn. Imagine what that would do for our schools, hospitals, infrastructure.

Going by the calamitous record these guys have of late I wouldnt be surprise if this figure is raised upwards in anycase in a few months/years.

Today is a very sad to for the generations of Irish, yet to be born, that will be paying the bill for these d!ckheads fcuking party. :mad:

iaminminsk

what is the cost including NAMA? These "haircuts" are based on pure fantasy. I wonder how much if anything these loans would fetch on the open market? Top brass leave AIB at last, why so late? I'm sure Brian will find them a job somewhere just as he has looked after the other disgraced bankers by finding them cushy numbers in Anglo and the Central Bank. All these billions and no-one shouted stop. What an utter disgrace.

moonpurple

Listen back to journalist Peter Matthews's cool headed, unafraid analysis from last sunday's
newstalk106.ie Carol Coleman programme.
Total losses are 66 billion. Big players in the market need to write down 26 billion. The pain has to be shared. Big players threw money at Ireland and went into this with their eyes open and they 'banked on' the Irish taxpayer being their trampoline but that is not feasible. Irish taxpayer takes up the rest of the loss.

joe316

Can we call ourselves a banana republic yet

We have a debt ratio this year of 32%, nowhere in the western world has a figure like that

https://www.youtube.com/watch?v=k2IwOemnjbI

moonpurple

joe316 wrote: »

Can we call ourselves a banana republic yet

We have a debt ratio this year of 32%, nowhere in the western world has a figure like that

https://www.youtube.com/watch?v=k2IwOemnjbI

thankfully this bit of that song has aged
'everywhere I go yah
everywhere i see
black and blue uniforms
..police and priests'

Blazer

Luckily things are going well for myself, yet though my father has payed taxes at the high rate for 46 years they're still haven't given him his social welfare after 6 weeks after he lost his job last year once his stamps ran out.
The man is 60, busted his ass for 37 years to feed and clothe his children, pay his taxes and well deserves his retirement but no..they want him to go back to work even with his back and knee problems. Yet I see the lazy fúcks with their minor illnesses milking the system and getting everything for nothing including his waster of a brother.
My brother's business closed and now he's on social welfare and it took months to get it sorted out.
Same for my other brother who's down to a 2 day week and finding it extremely difficult to manage.
My sister also had to take redundancy at her job and her degree in property isn't worth the paper it's written on and now she has to completely change her job skills.

Everyday day I see more and more of my friends struggling with money, trying to pay bills, feed the kids, pay for school books etc.
And then I see those idiots in Government claiming that they can reduce our deficit from 32% to 3% by 2014.
I mean...are people really that stupid that they can actually believe this?
I also meet people who are struggling and they tell me Ireland's turning a corner and it's going to get all better.
I pity their ignorance and naivety and rage at their stupidity that they can't see that Ireland is fúcked for at least 10 years, probably 20 by my reckoning.
If I had a family right now and on the dole I'll be looking for jobs in other countries and getting the hell out of here.

Pete M.

Some good news at last :rolleyes:

amacachi

Don't care any more, too late.

arybvtcw0eolkf

Sc@recrow wrote: »

My sister also had to take redundancy at her job and her degree in property isn't worth the paper it's written on and now she has to completely change her job skills.

Thats my worry about the moment, like I said. My son is doing a degree in property economics, and I honest dread to think whats ahead for him.

Secretly I've been browsing the IAVI.ie website to see what jobs are available oversea's for people with his degree. Its another few years off, but my fears are real right now.

I don't care about the minimum cost... We all know that it will be exuberant.

It's the maximum cost...

Again, I'm like most people here, pissed off over the whole lot. I love my country, yet all I see here is Greed, the political elite looking after their investor friends.

I'm 38, returned to college and in my last year in computer science, and looks like I will be joining my nephew and friends in going over to England next year when I graduate.

I did all this immigrating malarky 20 years ago...

F*cking glitch in the Matrix alright.

Kiith

I'm beginning to regret not taking that job in Liverpool

Blazer

Elisabeth Young Renter wrote: »

Thats my worry about the moment, like I said. My son is doing a degree in property economics, and I honest dread to think whats ahead for him.

Secretly I've been browsing the IAVI.ie website to see what jobs are available oversea's for people with his degree. Its another few years off, but my fears are real right now.

As long as he doesn't intend to use it here he might be ok...how is the hob sector looking abroad? Does he intend to move to another country?
I feel sorry now for families, having to watch their kids immigrating to find work...it's the 1980's all over again.

ilovelamp2000

I wonder how long it will be before this figure is revised upwards ...... like every other one we've seen.

SeaFields

Sc@recrow wrote: »

...it's the 1980's all over again.

I heard several people say that this time around its a lot worse than the 1980's. I'm too young to remember so I don't know.

mike kelly

Rosco1982 wrote: »

I wonder how long it will be before this figure is revised upwards ...... like every other one we've seen.

give it two months

mike kelly

SeaFields wrote: »

I heard several people say that this time around its a lot worse than the 1980's. I'm too young to remember so I don't know.

yes, it's much worse. We had some good music in the 80's and everything was cheaper

Gummy Panda

I wonder what the suicide rate will climb too.

ilovelamp2000

Only a few weeks ago the head of the NTMA was publically critical of this figure that the government are using now:

http://www.finfacts.ie/irishfinancenews/article_1020429.shtml

Does anyone in this country know what they're doing , or are they all just lying to us ?

thebigbiffo

ladies and gentlemen, you've just woken up to black thursday.

anyone fancy a trip down to stephens green to burn anglo to the ground?

Kiith

Can someone point me to somewhere that explains why we the government keep putting insane amounts of money into Anglo? I'm not trying to be smart here, i would actually like to understand why they can't just let what seems like a giant money hole, just shut down like so many other businesses have. What would happen if they just stopped bailing them out?

And, is anyone, ever, going to have to pay (not the money) for making such a ****storm of this?

tubba

god help us in the next budget. also what are the government going to do when the thousands that went to Australia have to come back and start claiming the dole??

tubba

Gummy Panda wrote: »

I wonder what the suicide rate will climb too.

i see it already down here in Kerry, suicide rate is huge at the moment and i'm sure the government will cut counselors etc. in all areas

arybvtcw0eolkf

Sc@recrow wrote: »

As long as he doesn't intend to use it here he might be ok...how is the hob sector looking abroad? Does he intend to move to another country?.

Well there have been jobs advertised in The Middle East. If your sis is a member of the IAVI she might find oversea's work there.

SeaFields wrote: »

I heard several people say that this time around its a lot worse than the 1980's. I'm too young to remember so I don't know.

Well in the 80's it was mostly a working class recession. This cluster fuck is hitting us all with its shrapnel.

Plus I think todays problems are so monumental that 'Joe Soap' on the ground simply can not grasp how dire the situation is, so Government and their cohorts are getting away with giving us bluster & bollox.

thebigbiffo

Kiith wrote: »

Can someone point me to somewhere that explains why we the government keep putting insane amounts of money into Anglo? I'm not trying to be smart here, i would actually like to understand why they can't just let what seems like a giant money hole, just shut down like so many other businesses have. What would happen if they just stopped bailing them out?

And, is anyone, ever, going to have to pay (not the money) for making such a ****storm of this?

they're afraid to f'uck over the investors as it'll affect our ability to borrow money on the international markets. thats the condensed explaination

tubba

Sc@recrow wrote: »

As long as he doesn't intend to use it here he might be ok...how is the hob sector looking abroad? Does he intend to move to another country?
I feel sorry now for families, having to watch their kids immigrating to find work...it's the 1980's all over again.

i have an engineering degree and find it impossible to get work. (i even applied for a job for experience with no wages. i was told that i didn't have enough "experience" to get work experience where i would work for free. also i enquired about it to the dole office and found out i could lose my dole because i am not available to start a job????)
back to the point. i have been applying for work everywhere, dubai etc and no luck.
most of my old class mates have gone out foreign looking for work but most have returned with nothing..

cruiser178

galwayrush wrote: »

We're leaving once the kids finish school, they deserve better than anything this country has to offer them for the future.

Best of luck to you galwayrush and i mean that sincerely.

amacachi

Kiith wrote: »

Can someone point me to somewhere that explains why we the government keep putting insane amounts of money into Anglo? I'm not trying to be smart here, i would actually like to understand why they can't just let what seems like a giant money hole, just shut down like so many other businesses have. What would happen if they just stopped bailing them out?

And, is anyone, ever, going to have to pay (not the money) for making such a ****storm of this?

Unfortunately we're probably too far in now to stop. Bear in mind people giving out about cuts, if the money stops going into the banks they collapse, all the money already spent will be gone, the system will collapse, money will stop moving, we won't be able to borrow anything (necessitating more cuts again) and no help from the EU.

Father Damo

tubba wrote: »

god help us in the next budget. also what are the government going to do when the thousands that went to Australia have to come back and start claiming the dole??

There wont be many. In nearly two years here Ive only seen seven of the hundreds of Irish Ive met go home- all the rest are either hanging around on student visas or plain going illegal after the visa expires.

**** it even if the economy was going well I wouldnt go home, even in the good times the cost of living was too much.

tubba

just heard on the radio that now it is almost 50 billion. reminds me of a dodgy builder that just keeps uping the cost something

Niall Keane

i have an engineering degree and find it impossible to get work.

Tubba, learn Mandarin, it's going to be China's century, 1 in 4 people speak Mandarin, and they don't speak English. Was out there a few weeks ago, in Hubei, central China, Wuhan airport is about 3 times the size of Dublin's Terminal 2, and Wuhan only does domestic flights.
There were no self-congratulatory propaganda on screens celebrating the project like in Dublin either, and they are the one's supposed to be a communist country!

We are a joke, Wuhan that Chinese back-water has 20m people, imagine the scale of development required. 87m people in Hubei alone. Ireland offers nothing to the outside that can't be acquired cheaper and better somewhere else, and our population is simply too small to drive a sustainable domestic economy, we have ever been such, the Celtic Tiger we all now know was an anomaly, my advice - don't let the sins of the fathers visit on the children, get out!!

Wibbs

Elisabeth Young Renter wrote: »

Well in the 80's it was mostly a working class recession. This cluster fuck is hitting us all with its shrapnel.

I dunno about that. I went to a middle class private school and of my year that graduated in the 80's at least a quarter left the country, either for work or college. Many of the others ended up on the dole here or went into daddies biz to keep them off the streets. The working class got hit the hardest(as per usual), but there were few jobs across the board. Fewer college places too, so even if you wanted to continue in third level the choice was lower than today and more competitive. Of course again the powers that be missed the obvious, IE a late 60's babyboom, that came of age in the 80's with no facilities or jobs for them. We had the youngest population in the EU at the time.

Plus I think todays problems are so monumental that 'Joe Soap' on the ground simply can not grasp how dire the situation is, so Government and their cohorts are getting away with giving us bluster & bollox.

That I would agree with alright. The figures and the fckup is so huge it's hard to grasp. Plus we have the trappings of (borrowed) wealth around us, so it feels to many still in employment as not such a big deal. In the 80's and before we didnt have that so it was much more in your face.

andrewdeerpark

Investors regularly get burned remember Russia in the 90's opening up all the investors got in to early and got burned. Investors have short memories though and the all piled back in again in the 00’s.

Conclusion we never needed that blanket bank guarantee, which made my blood boil the day it was announced.

Brian Lenihan you ruined the country when those treasonous Irish bankers who done more damage on that night to our Irish State since its foundation bounced you into that decision. I guess these guys are still big fellas in their D4 golf clubs and societies with their fat pensions and benefits (and I am excluding Sean Fitzpatrick who has a special place in Irish discraceful history). Them and their families name are dirt in my mind and in the mind of many..

As for Brian Lenihan since his sickness he seems untouchable (unlike Biffo) he made a disastrous decision that night and should immediately resign.

Remember we were the only country that went down the lazy blanket guarantee route; the correct way was to look at each bank individually like the UK, US, Germany and even Iceland.

In the UK the banks that they bailed out are now even turning a profit for the taxpayer!!!

Wibbs

amacachi wrote: »

Unfortunately we're probably too far in now to stop. Bear in mind people giving out about cuts, if the money stops going into the banks they collapse, all the money already spent will be gone, the system will collapse, money will stop moving, we won't be able to borrow anything (necessitating more cuts again) and no help from the EU.

That part I get re the main banks, but why support anglo. Why not let that bank fail?

SeaFields

Father Damo wrote: »

There wont be many. In nearly two years here Ive only seen seven of the hundreds of Irish Ive met go home- all the rest are either hanging around on student visas or plain going illegal after the visa expires.

I know a fair amount of people in oz at this stage, as do so many people i suppose. Last week I was talking to a buddy whose sister is over there and her one year visa is about to expire. The buddy told me his parents sat down together and skyped her. Told her in no uncertain terms, do not come home. There is nothing here. He said it was a horrendously depressing thing to watch them tell their only daughter to stay on the other side of the world.

Phill Ewinn

Kiith wrote: »

Can someone point me to somewhere that explains why we the government keep putting insane amounts of money into Anglo? I'm not trying to be smart here, i would actually like to understand why they can't just let what seems like a giant money hole, just shut down like so many other businesses have. What would happen if they just stopped bailing them out?

And, is anyone, ever, going to have to pay (not the money) for making such a ****storm of this?

It makes little or no sense to have bailed out a small private bank with debts that amounted to half our GDP. I can only hope it was something we were told to do by ''Europe'' or the European central bank. The other scenario is that the Government were so reckless as to extend a guarantee to their mates in Anglo, that would surely cripple a country in deep recession. Which would be an act of treason.

Zebra3

joe316 wrote: »

Can we call ourselves a banana republic yet

At least if we were a banana republic, we'd have somthing to export.

Great cartoon in today's Indo:
http://www.independent.ie/opinion/columnists/martina-devlin/martina-devlin-bankers-without-rules-like-wild-west-without-sheriff-2358938.html

tubba

Niall Keane wrote: »

Tubba, learn Mandarin, it's going to be China's century, 1 in 4 people speak Mandarin, and they don't speak English. Was out there a few weeks ago, in Hubei, central China, Wuhan airport is about 3 times the size of Dublin's Terminal 2, and Wuhan only does domestic flights.
There were no self-congratulatory propaganda on screens celebrating the project like in Dublin either, and they are the one's supposed to be a communist country!

We are a joke, Wuhan that Chinese back-water has 20m people, imagine the scale of development required. 87m people in Hubei alone. Ireland offers nothing to the outside that can't be acquired cheaper and better somewhere else, and our population is simply too small to drive a sustainable domestic economy, we have ever been such, the Celtic Tiger we all now know was an anomaly, my advice - don't let the sins of the fathers visit on the children, get out!!

at this stage niall it semms like the best option.i have a five yr old son and i would hate to see him having to pay for our mistakes for the next 40 years.

mike kelly

Rosco1982 wrote: »

Only a few weeks ago the head of the NTMA was publically critical of this figure that the government are using now:

http://www.finfacts.ie/irishfinancenews/article_1020429.shtml

Does anyone in this country know what they're doing , or are they all just lying to us ?

or both?

SeaFields

Phill Ewinn wrote: »

The other scenario is that the Government were so reckless as to extend a guarantee to their mates in Anglo, that would surely cripple a country in deep recession. Because that would be an act of treason.

If thats the case then the Icelandic folk have the right idea

If only that would happen here....if only

arybvtcw0eolkf

tubba wrote: »

i have an engineering degree and find it impossible to get work. (i even applied for a job for experience with no wages. i was told that i didn't have enough "experience" to get work experience where i would work for free. also i enquired about it to the dole office and found out i could lose my dole because i am not available to start a job????)
back to the point. i have been applying for work everywhere, dubai etc and no luck.
most of my old class mates have gone out foreign looking for work but most have returned with nothing..

Have you considered a career as an engineer officer in The Defence Forces?.

Your degree might get you fast tracked through the cadet school into a commission.

mike kelly

SeaFields wrote: »

I know a fair amount of people in oz at this stage, as do so many people i suppose. Last week I was talking to a buddy whose sister is over there and her one year visa is about to expire. The buddy told me his parents sat down together and skyped her. Told her in no uncertain terms, do not come home. There is nothing here. He said it was a horrendously depressing thing to watch them tell their only daughter to stay on the other side of the world.

I think they made a mistake doing that, how will she react to her parents telling her she is not wanted at home?

andrewdeerpark

Wibbs wrote: »

That part I get re the main banks, but why support anglo. Why not let that bank fail?

Correct and right.

Pay the depositors 100K sell off the debt in an international auction, job done min cost.

Ok a few charities and large depositors would winge, the riot police may be needed for a few weeks outside the bank, all a fraction of the cost we have now. Bank has no branches and no one get their wages paid into the bank.

No brave decisions from this government.

tubba

Zebra3 wrote: »

At least if we were a banana republic, we'd have somthing to export.

Great cartoon in today's Indo:
http://www.independent.ie/opinion/columnists/martina-devlin/martina-devlin-bankers-without-rules-like-wild-west-without-sheriff-2358938.html

ha ha very good.