MINISTER FOR Finance Brian Lenihan has moved to allay fears that the establishment of the National Asset Management Agency (Nama) could be delayed, saying it should proceed as timetabled unless it is bogged down by a lengthy Dáil debate.
Shares in the two main banks, which fell heavily on Wednesday, recovered some ground yesterday.
AIB closed up 10 cent at €1.95 and Bank of Ireland was 18 cent stronger at €1.83. Their falls on Wednesday – of 20 per cent and 25 per cent respectively – had been attributed in part to Mr Lenihan’s flagging of possible delays in the establishment of Nama.
But Mr Lenihan changed tack yesterday when speaking to journalists ahead of an address to an Irish Banking Federation conference in Dublin. “We plan to complete this legislation as quickly as possible,” he said. “The legislation can be enacted by the middle of November. There is no difficulty. It’s a matter of weeks.
“The Government has made it clear that this debate will be closed next week. We will move into the next stage of the debate in the Dáil and then to the Seanad.”
Mr Lenihan also said he believed Nama could meet a deadline to start transferring the biggest loans from the banks by the end of the year.
He said too much had been read into his comments, and he did not believe there was a “direct linkage” between the performance of Irish financial stocks and what he had said.
“If you look at what happened to bank shares yesterday [Wednesday], it was part of a worldwide trend,” he said.
“There were very poor results at Santander, a very important Spanish bank . . . In general, as we know, bank shares tend to move because of international events and this is no exception.”
In his address to the conference on rebuilding confidence in the banking system, Mr Lenihan said three issues the Government considered fundamental to ensuring Ireland’s economic recovery – the ratification of the Lisbon Treaty, Nama and a strong December budget – were well on course.
He said the decisive Yes vote in the Lisbon referendum had instilled a measure of confidence in Ireland and its significance could be seen by the fact that the National Treasury Management Agency floated a 15-year bond issue worth €7 billion just days after its ratification.
AIB chairman Dan O’Connor said the lender could face “serious consequences” from negotiations with the EU over the Government’s capital injection in the bank earlier this year.
“We have seen what’s happened this week in terms of ING,” Mr O’Connor told reporters at the conference, referring to EU demands on the Dutch financial-services company. “Draconian measures have been taken.”
ING agreed earlier this week to EU demands that it sell its insurance units to secure approval for a state bailout.
The European Commission is reviewing bailouts to ensure banks that get government money do not have an unfair advantage.
Mr O’Connor said AIB, which received €3.5 billion from the Government this year, expects three to six months of active negotiations with EU authorities once it submits its restructuring plan.
Mr O’Connor said the sale of assets, strategic shareholding, public markets and Government support would be used to generate adequate capital levels. “We don’t know what’s going to happen to our organisation but certainly it’s going to have serious consequences.”
Mr O’Connor declined to comment on the potential consequences, adding that markets were “surprised” by the ING decision.
