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Irish bank stocks surge on govt

Irish bank stocks surge on govt

Irish bank stocks surged Thursday after the government unveiled plans to spend ⁈lion ($79 billion) to shift their toxic debts to a new state-run "bad bank."
Allied Irish Banks PLC was trading 25 percent higher at ⁈$4.74) in early trade on the Irish Stock Exchange, while Bank of Ireland was up 11 percent at ⁈$4.55). Earlier this year shares in both banks reached record lows of ⁈nd ⁈as they appeared on the verge of nationalization.
Now, Ireland's two biggest banks are in line to become major beneficiaries of the government's planned National Assets Management Agency.
Finance Minister Brian Lenihan says the agency will pay five banks ⁈lion to take over their riskiest loans _ to developers for depreciating land and property stretching from Ireland to the United States _ totaling ⁈lion ($113 billion).
Allied Irish plans to transfer ⁈lion in outstanding loans, Bank of Ireland ⁈lion, and record losses approaching 30 percent in the process. The government already holds 25 percent stakes in both institutions after giving them ⁈llion each earlier this year.
Allied Irish said Thursday it will need to drum up an extra ⁈ion from international investors or foreign banks to cover its losses from the write-off and transfer of those loans.
Shares in Ireland's other publicly listed bank _ Irish Life & Permanent PLC, Ireland's biggest provider of residential mortgages and insurance _ initially rose Thursday but fell back, and was down 0.8 percent at ⁈$8.54). Irish Life & Permanent is the only major Irish-owned bank not receiving state aid and has no plans to sell toxic debts at a discount to the new agency.
Anglo Irish Bank, a specialist small-business lender that the government nationalized in January, is expected to transfer loans totaling ⁈lion _ 40 percent of its entire loan book _ to the agency, while Irish Nationwide will shift ⁈ion _ 80 percent of its book. The remaining ⁈ion in loans is to come from the EBS Building Society.


Updated : 2021-10-26 05:20 GMT+08:00