EBS said today it has received €100 million from the Government in a move which effectively brings the institution under State control.
The funding, which comes in the form of Special Investment Shares, is the first instalment in a €875 million capital injection.
The EBS requires the funds to bring capital reserves up to the Financial Regulator’s new levels to cover anticipated bad loans and losses from transferring €1 billion in loans to the National Asset Management Agency (Nama).
The Minister for Finance "may well" change the lender's board, chairman Philip Williamson said at its annual investor meeting in Dublin today.
"We have been lying in bed with the elephant," Mr Williamson said at the meeting. "I wish we had not done that commercial lending."
EBS last month reported a loss after tax of €79 million for 2009 after setting aside more cash for bad loans. "One of the costs of seeking capital from the government is that the government takes control," Mr Williamson said today
The building society had held talks with an investment consortium led by Cardinal Asset Management and including US private equity firm JC Flowers, which has a track record of investing in distressed financial institutions.
It is expected to submit its viability plan to the European Commission under state aid rules over the coming weeks ahead of the initial expected delivery at the end of June.
The building society's chief executive Fergus Murphy said a private transaction was still possible.
"There are a number of private interests interested in EBS and it is possible that private equity, private capital may look to get involved in EBS," Mr Murphy told the meeting.