WHAT HAPPENS NEXT:THE AUCTION to transfer deposits and "corresponding assets" out of Anglo Irish Bank and Irish Nationwide will conclude "as quickly as possible", the National Treasury Management Agency (NTMA) has said.
The auction is expected to be completed within a couple of weeks.
A number of financial institutions signed non-disclosure agreements on Monday to participate in the NTMA-led auction, the High Court was told yesterday.
The court heard that the deposits would be sold to an institution with a long-term future.
Bank of Ireland, AIB and Irish Life and Permanent are among the institutions interested in the deposits, which amount to about €10 billion at Anglo and about €4 billion at Irish Nationwide.
It is understood that the bonds issued by the National Asset Management Agency to Anglo and Irish Nationwide for the loans acquired from the two lenders may also be transferred as the corresponding assets matching the deposits.
These amount to about €12 billion at Anglo and €3 billion at Irish Nationwide.
Other assets that could be transferred with the deposits include other government securities, loans or cash.
Deposit-buyers typically pay anywhere between 0.25 per cent and 3 per cent of the value of the deposits, paying a higher price for retail deposits which are regarded as more secure or “sticky”.
The price paid will also be based around the duration of the deposits – the longer dated they are, the more they are worth.
Interested parties will also consider the cost of servicing the deposits and may pay more if this can be covered by existing staff.
The deposits will help improve the funding of the bank or banks acquiring the liabilities.
They will also reduce their reliance on outside borrowing in the markets, and bring their loans-to-deposits ratio – a closely-watched measure in the crisis-hit banking sector – into or close to the desired 100-120 per cent range.
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