EBS gets €525m injection from State

The Government has injected a further €525 million into EBS Building Society, it was confirmed today.

The new funding comes through special investment shares issued to Minister for Finance Brian Lenihan. The shares give Mr Lenihan control of the building society, including the composition of theboard and passing of members' resolutions.

The latest funding means EBS will meet the core tier 1 capital ratio of 8 per cent by December 31st.

The institution was told by the Central Bank in March to raise €875 million by the end of December. However, in November it told the building society it needed to increase its capital ratio to 13.5 per cent by the end of the year, meaning it needs to find an additional €438 million. The Central Bank today said it has since extended that deadline to the end of February.

Other lenders had been given until at least the end of February to achieve new targets, set on November 28th.

EBS, which the government is currently looking to sell, has already received €100 million in funding from the State in the form of a promissory note, and a €250 million injection through the issuance of special investment shares.

Irish Life & Permanent and Dublin-based private equity group Cardinal Asset Management are currently bidding to buy EBS. FInal bids are expected to be in next week.

New legislation coming before the Dáil today will give the Minister for Finance new powers that would allow the Government to inject further funds required if the EBS is not sold.

Additional reporting: Bloomberg