Following an application by the Minister for Finance earlier today, the High Court has issued two Transfer Orders under Part 5 of the Credit Institutions (Stabilisation) Act 2010 for the immediate transfer of the deposit books and corresponding assets of Anglo Irish Bank Corporation Limited (Anglo) and Irish Nationwide Building Society (INBS) to Allied Irish Banks, p.l.c. (AIB) and Irish Life & Permanent plc (ILP) respectively.
The Minister, having consulted with the Governor of the Central Bank of Ireland, was of the opinion that these Transfer Orders were necessary to ensure that both Anglo and INBS are in a position to continue the process for their restructuring in accordance with the provisions of the EU/IMF Programme of Financial Support for Ireland (the Programme). The Minister, welcoming the Orders stated “This is a decisive step towards resolving the position of Anglo and INBS in a way that protects depositors and strengthens the banking system.”
The Programme, which endorsed the Government's approach, provides for a significant change to the banking system in a way that will protect depositors, seeks to minimise capital losses arising from the work-out of Anglo and INBS and strengthens the overall banking system. In line with this commitment, a plan for the restructuring and work-out of Anglo and INBS was submitted to the European Commission on 31 January 2011 in accordance with EU State aid rules.
The Transfer Orders enable the State to continue the process of restructuring Anglo and INBS as envisaged in their restructuring plan in a manner that benefits from necessary legal protections which is recognised in other EU Member States.
No action is required to be taken by depositors following the making of the transfer orders by the High Court. The position of depositors in both Anglo and INBS remains fully secure following this transfer. Customers of Anglo and INBS should be reassured that their deposits remain protected under existing Government guarantee arrangements. The transfer will have no impact on existing terms and conditions. Depositors continue to have access to their funds in the normal manner as they had under their arrangements with Anglo or INBS.
Certain employees who deal with the deposit taking activities in Anglo and INBS have transferred to the relevant acquiring bank. Their existing terms and conditions are safeguarded in accordance with applicable employment legislation.
24 February 2011
Notes to Editor
In accordance with the Programme, a joint restructuring and work out plan for these two institutions was submitted on 31 January 2011 to the EU Commission for approval under State Aid rules. The plan envisages the orderly work out of Anglo and INBS over a period of years and, as part of the process, the immediate transfer of deposits from Anglo and INBS to third party credit institutions, namely AIB and IL&P respectively. This plan is now being considered by the Commission, in consultation with the other External Authorities as necessary.
Q&A Anglo INBS Transfer
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