Ireland's two leading banks will have to pay about €20 million each as part of the new bank levy announced in the Budget.
The Minister for Finance, Mr McCreevy, yesterday announced a new levy on all Irish financial institutions, whereby they will pay a total of €100 million per annum in each of the next three years to 2005.
Each bank's contribution will be weighted by their share of the retail deposit market which means Bank of Ireland as market leader will pay an estimated €22 to 25 million and AIB around €20 million. Irish Life and Permanent will pay around €11 million.
The levy, which was one of the surprises in the Budget, has been described as "blunt and unfair" by Mr John Kelly, banking analyst at NCB stockbrokers.
However, Mr Kelly said its impact is likely to be modest in the context of the leading banks' profits - which were both over €1 billion last year.
Mr Stuart Draper, of Dolmen Butler Briscoe stockbrokers, describes the levy as "a populist move" which could damage international investor sentiment towards the Irish banks.