There is something common about Allied Irish Bank, Bank of Ireland and Anglo Irish Bank ? All these banks are struggling with their balance sheets and revenues. In such a scenario, you would find that some element of external assistance is welcome. A 10 Billion Pounds making a bailout plan is something all these banks were waiting for!
Anglo Irish Bank is one of the biggest banks, that is seemingly poised to be taken over by one of the other two banks.
Couple of months before, the Government had planned for a fiscal revival. As on date, you would find that the Government has somewhat been pushed back on the agenda.
The 10 Billion Pound was seemed to a good enough amount to rescue the fortunes of the banks. But what really happened over time is ? This amount has not been good enough for these banks to survive!
The stocks of all these banks were supposed to hit a new high. But quite the converse happened this time around. The stocks of all these banks hit an all-time low on some of the subsequent days.
There have been a lot of plans laid by the Government trying to finalize the lending norms for the financial institutions.
Anglo Irish Bank is poised to have a change at the top. The change is expected to come through Richie Boucher, the head of retail financial services for Bank of Ireland. He is been seen as a guy who could take over the role of Chief Executive Officer of the AIB.
What is one big problem for the Anglo Irish Bank? Well ? For most struggling banks now, assets is something they need. The story is not any different for the AIB with it requiring 2.6 Billion Pounds.
The Bank of Ireland seems to require an injection of 3.4 Billion Pounds and the AIB may require an injection of about 3.9 Billion Pounds.
EBS and Irish Nationwide is seemed to be set for a merger. This merger would bring together two societies and needless to say, a financial turnaround is on the cards for sure.
It has also emerged that distressed Irish banks will have to pay the Government a premium of 10pc per annum to avail of the new ?10bn rescue fund.
It is widely believed that the stakes in AIB is pretty low this time, with seen erosion in the capital some days ago. This possibly has also resulted in having a fix on the sale value of AIB.
The announcement coming from the government could have resulted in some kind of cheer with the banks. In fact, the 11th hour news from the government seems to have bought in more gloom for these banks.
It remains to be seen how the bailout money would be spent on the banks. In fact, ask most financial experts and this is one question that they fail to answer. It remains a suspense, which can only be revealed with time.
Mallabraca, a private US Equity firm, for now does not seem to show any interest in the Anglo Irish Bank.