STATE-OWNED Anglo Irish Bank has hired consultants from the international headquarters of accountancy firm KPMG in Holland to cost various options facing the bank, including the winding down of the lender over time.
Anglo’s chief executive, Australian banker Mike Aynsley, has recruited the firm to assess and cost the immediate wind-up of the bank, the winding down of the business over time and the viability of Anglo as a going concern.
The consultants are also costing and assessing variations on these options. Their conclusions will inform the restructuring plan that Anglo must submit to the EU Commission by the end of this month to win approval for the Government’s €4 billion recapitalisation.
Mr Aynsley has told Anglo employees the bank has a viable future, and has made references to “setting the platform in place for the New Anglo Bank” in an internal e-mail circulated to staff.
Frank Daly, the former Revenue Commissioners chairman and a Government-appointed director on the Anglo board, told a conference last week the bank was “actively considering” whether the bank has a future in lending to the small and medium-sized business sector.
KPMG is working closely with outside consultant Tom Hunersen, who was hired by the bank in recent months. Mr Hunersen, an adviser on strategy, worked with Mr Aynsley at National Australia Bank and has also worked with Bank of Ireland in the US.
Irishman Anthony Whelan, head of cabinet to EU competition commissioner Neelie Kroes, said last week “a very radical solution” may be necessary for Anglo, and that the Government should “consider all the options available”.
A number of senior management changes are expected over coming weeks as the bank fills several pivotal executive roles.
The Government invested €4 billion into the bank after losses of €4.1 billion in the six months to March 2009 wiped out the bank’s capital reserves. Anglo is expected to require another large capital injection to cover mounting losses on the bank’s €72 billion loan book and to restore the lender’s capital reserves to international norms.
Minister for Finance Brian Lenihan said last week that any further capital injection into the bank would not exceed the €4 billion already invested by the State.
The bank will sell loans of €28.4 billion to the National Asset Management Agency (Nama), which will crystallise losses at the bank as the State will buy the loans at an as-yet-undisclosed discount.
Allied Irish Banks (AIB) said on Wednesday it was increasing its bad debt charge for this year by €1 billion to €5.3 billion, primarily due to expected higher losses on Nama-bound loans of €24.1 billion.
Anglo will move 110 staff into a separate division to supervise loans moving to Nama.
Irish Nationwide has hired a team of accountants from Ernst Young to assist the building society on the valuation of €8 billion loans moving to Nama and to establish a unit within the lender to work with the State agency.
