IRISH NATIONWIDE has been taken over by Anglo Irish Bank which will be renamed Irish Bank Resolution Corporation following an order of the High Courton an application by Minister for Finance Michael Noonan.
The legal merger marks the end of Irish Nationwide’s 138 years as a standalone financial institution.
The merged Anglo/Irish Nationwide entity, to be known as IBRC, will be run down over 10 years.
The order merging Irish Nationwide into Anglo and EU approval for their wind-down were “significant milestones in removing these banks from the Irish banking system”, said Mr Noonan.
The Minister said the name was being changed “to remove the negative international references associated with the appalling failings of both institutions and their previous management”. The purpose of the merger was to ensure “a concentrated and vigorous work-out of the existing loans”, he said.
The Government has committed €29.3 billion to Anglo and €5.4 billion to Irish Nationwide.
Anglo said the name change would take “a few months to complete” due to “legal formalities and operational requirements” but that, following the change, the Anglo name would cease to exist.
“This name change is of symbolic importance to all of us as we move on from the past,” said Mike Aynsley, Anglo’s chief executive.
Irish Nationwide chief executive Gerry McGinn will report to Mr Aynsley under the merged structure into which 217 Irish Nationwide staff are moving.
Irish Nationwide chairman Danny Kitchen and non-executive directors Sean Carey and Government appointees Adrian Kearns and Rory O’Ferrall have resigned.
Mr McGinn, chief financial officer John McGloughlin and non-executive director Roger McGreal will continue to act as non-executive directors of Irish Nationwide as “a shell entity” owned by Anglo.
Customers were reassured that they can still use their accounts at both institutions as normal.
A court order under the Credit Institutions (Stabilisation) Act, the Government’s emergency banking law, was required as the merger could be viewed as “an event of default”, the court was told.
Department of Finance official John Moran told the court in an affidavit that of particular concern was Irish Nationwide’s unguaranteed senior bonds, on which €600 million is outstanding.
Mr Moran said in his affidavit, parts of which were redacted due to commercially sensitive information, that Irish Nationwide had been in receipt of emergency liquidity assistance funding since February 18th but the amount drawn was withheld.
The court was told that the continued existence of Irish Nationwide was a factor in the destabilisation of the Irish banking system and that its losses were a reason for the EU-IMF bailout.
Mr Justice Brian McGovern granted the orders sought – the last in a series to merge and facilitate the wind-down of Anglo and Irish Nationwide – including a protection order under the EU Credit Institutions Winding Up Directive.
About 15,000 Irish Nationwide mortgages of more than €2.9 billion and commercial loans of €600 million will move to Anglo.
