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Alan Dukes: Ireland needs a second bad bank

The Anglo chairman and former FG leader tells a conference Ireland needs a second NAMA.

Image: Niall Carson/PA Wire

THE CHAIRMAN of Anglo Irish Bank has told a conference of accountants this afternoon that Ireland needs a second state-owned bad bank to pick up distressed loans after NAMA had finished its work.

RTÉ reports that Dukes told the Chartered Accountants Leinster Society that while it was possible for the recovery bank being set up as an offshoot of Anglo itself to be used for such a purpose, Dukes was adamant that even when NAMA’s terms of reference had been fulfilled, Anglo and other bank would still be in possession of ‘distressed’ assets that would necessitate further intervention.

Dukes added that if banks had to deal with distressed assets after NAMA had finished its work, it made sense that they all be dealt with in one place.

He was not suggesting that the Anglo offshoot be used for this purpose, the Irish Times clarifies, but he suggested it could potentially be used as such a platform.

The government set up the National Asset Management Agency in 2008 in order to purchase impaired loans from the country’s banks at a discount, thereby injecting the banks with capital and eliminating underperforming loans from their balance sheets.

Last month the government raised the threshold for the loans that NAMA would seek to acquire from Irish banks would be raised from €5m to €20m – meaning that approximately €6.6bn in loans originally earmarked to be transferred to its books would now remain in the hands of the banks that made such lending in the first place.

This move, Dukes felt, would mean that NAMA would not “have dealt with the whole problem” after it had finished the transfer of €74bn in loans onto its own books.

Dukes was appointed to the board of Anglo in December 2008 after the government recapitalised the bank to the extent that it took national control of it.

About the author:

Gavan Reilly

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