IBRC liquidators prepare final €2.5bn tranche of loans for sale

The liquidators of Irish Bank Resolution Corporation (IBRC), formerly Anglo Irish Bank, have told the Government that the €12.9 billion advanced by the State to fund the wind-down will be fully repaid by the third quarter of this year.

In a progress report presented to the Department of Finance by the liquidators from KPMG, Kieran Wallace and Eamonn Richardson, they said €10.9 billion has already been repaid to taxpayers from the proceeds of IBRC loan sales with a face value of €21.7 billion.

The liquidators are also preparing to launch the sale of the remaining €2.5 billion of loans. This will include about 6,500 residential mortgages with a face value of €650 million, as well as €1.4 billion of commercial property loans and €400 million of corporate loans to Irish businesses.

The liquidators will tender for advisors for these loans in coming weeks. It has not yet been decided if individual IBRC mortgage holders will be able to buy back their loans as part of the upcoming process, but it is thought unlikely.

The progress report also reveals the amounts spent on professional advisors such as lawyers and accountants so far during the liquidation process.

About €119.2 million was billed over 14 months to the end of March by various professional firms. This was reduced to €111.6 million after Michael Noonan, the minister for finance, intervened seeking a reduction. Advisors still managed to pull fees of €8 million monthly from the State-owned bank, however.

KPMG billed the State for €48.4 million in relation to the liquidation, although it reduced this by €5 million following the minister’s intervention.

Dublin law firm A&L Goodbody billed IBRC for more than €25 million, which was later cut by 10 per cent. Linklaters, which worked on UK loan sales for IBRC, billed it by almost €16 million. Linklaters does not appear to have promised the minister a rebate on its fees already earned, but did agree to cut its prices by 5 per cent for any work conducted between Febraury and July this year.

About €70 million of the professional fees related specifically to loan sale transactions, with more than €41 million attributable to the actual liquidation process. The liquidators told the State that the process had saved about €56 million in overheads so far.