CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Irish Banks Being Courted By Private Equity Group

Irish Banks Being Courted By Private Equity Group

by Jason Gorringe, Tax-News.com, London

26 November 2008


Reports this week have suggested that moves by a private equity consortium to gain a significant stake in the Bank of Ireland (BoI) are continuing.

The group – which calls itself the Mallabraca consortium – is made up of US private equity firms and Middle-Eastern sovereign wealth funds, and is thought to have offered investment of up to EUR5bn in BoI, assuming that the government would be also be prepared to put up between EUR1-3bn.

Mallabraca is understood to be in favour of a merger between BoI and Irish Life and Permanent, a prospect which has caused some controversy.

In a statement published on Tuesday, General Secretary of the Irish Bank Officials Association, Larry Broderick argued that significant private equity involvement in Bank of Ireland "would represent a disaster for the Bank’s customers, staff, share-holders and for the country as a whole".

“Far from facilitating this development, the government should intervene now to advise the bank that such an approach would offer a short-term easing of its current problems – but at too high a cost in the long term,” Broderick added, going on to argue that:

"Furthermore, if the government were to acquiesce to the involvement of private equity funds, it would undermine the very objectives enunciated by the Minister for Finance at the launch of the state guarantee: objectives like protecting the public interest, capping excessive remuneration packages, providing for greater regulation and transparency – as well as facilitating the release of credit into the economy."

He also expressed concern with regard to potential job losses which could result from a merger between BoI and Irish Life and Permanent.

Irish Finance Minister, Brian Lenihan has suggested that although state investment in the banks in question is not off the cards, it should be a last resort.

The Finance Minister separately revealed this week that the Irish banking sector may be able to take advantage of around EUR30bn in funds from the European Investment Bank to increase its access to, and ability to offer, credit over the coming years.


To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »