ANGLO IRISH Bank and Irish Nationwide are finalising a joint plan for the merger and run-down of the lenders over time as their boards meet ahead of the plan’s submission on Monday to the European Commission.
Irish Nationwide’s board met yesterday to sign off on the plan, while Anglo’s board will meet today before the plan is submitted to the European Commission for approval under State aid rules.
The Department of Finance is believed to be keen to minimise the level of job losses initially.
The plan must be submitted by the deadline on Monday under the €85 billion aid programme agreed by the Government with the European Union and the International Monetary Fund.
Spokesmen for Anglo and Irish Nationwide had no comment to make ahead of one of the first deadlines in the banking plan within the EU-IMF programme.
Under the proposals, the remains of Irish Nationwide left after the transfer of loans to the National Asset Management Agency will be merged with the rump of Anglo. The deposit books of both transferred out to improve the funding of other parts of the domestic banking system.
Deposits at both institutions – estimated at less than €14 billion at Anglo and about €4 billion at Irish Nationwide – will remain guaranteed by the Government.
The remaining loans – about €37 billion at Anglo and €2.5 billion at Irish Nationwide – will be run down over a period of years in winding up of the merged entity.
The loans will be worked out using a structure based around an asset recovery bank over an extended period to seek the maximise the value from the assets.
The restructuring of the two lenders is expected to result in job losses across both institutions.
Early estimates suggest that between 100 and 200 jobs may be lost across both institutions initially in the merger if it is approved by Brussels. Anglo has a about 1,300 staff and Irish Nationwide about 450, of whom about 200 are based across 50 branches.
The combined headcount of the merged entity, which will include the Nama units of both institutions, could fall to about 1,000 within about a year of the merger.
