Minister for Finance Brian Lenihan today welcomed an approach from private investors to pour more than €2 billion into the State’s struggling banks but said the Government was not committed to any one investor.
The investment subsidiaries of AIB, Irish Life Permanent and Bank of Ireland and a number of other Irish and international institutions are developing a plan to recapitalise the domestic banking system as co-investors with the State.
The proposal, tabled to Mr Lenihan in talks yesterday, could see them invest in excess of €2 billion in funds they manage for clients into the six institutions covered by the State guarantee scheme: AIB, Bank of Ireland, Irish Life Permanent, Anglo Irish Bank, the Educational Building Society and Irish Nationwide Building Society.
An equal amount, if not more, would be required from the Government or a Government body such as the National Pension Reserve Fund.
“I welcome private investment in our banking institutions from whatever source,” said Mr Lenihan, during a Dáil debate.
“But with any such source and any such investment, we must be assured it is in the public interest of the people of this State and of the maintenance of the banks as viable credit institutions.
“I have not ruled out the co-investment by the State in support of any such private investment and the State is not committed to any particular private investor.
“I especially welcome the announcement that a fresh consortium has emerged yesterday,” he added.
The consortium made the approach to Mr Lenihan through the Irish Association of Investment Managers (IAIM), a representative body for the industry.
The chairmen and chairwomen of the six banks covered by the state guarantee scheme — AIB, Bank of Ireland, Irish Life and Permanent, Anglo Irish Bank, EBS and Irish Nationwide — have been notified about the terms of the rescue package.
Joan Burton, deputy leader and finance spokeswoman of the Labour Party, demanded reassurances from Mr Lenihan that “foreign equity capitalists circling like vultures” would not be allowed to take over the Irish banks.
The Minister insisted that any deal must be in the interests of the public. “Of course, private investors express interest in banks and financial institutions,” he said. “That does not mean the State is committed to any of them. Our duty is to ensure the banks are operated in the public interest and provide credit for the economy.”
The co-investment plan is being promoted to the Government as a long-term commitment by the private investors. Mr Lenihan is meeting tomorrow with the chiefs of the six banks covered by the State’s guarantee scheme.