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State-owned British banks ‘bailed out Irish ones by €16bn’ – report

The Sunday Telegraph says a quarter of the British taxpayer’s bailouts of RBS and Lloyds has gone to Ireland.

Image: Johnny Green/PA Wire

A NEWSPAPER REPORT has suggested that British taxpayers have bailed out Irish banks to the tune of over €16 billion – with over a fifth of the total British banking bailout bill going to Irish banks.

The Sunday Telegraph reports that the two banks bailed out by the British taxpayer during the banking crisis – the Royal Bank of Scotland (RBS) and Lloyds TSB – passed on £14 billion of their taxpayer funding to Irish subsidiaries.

The payments, made between 2009 and 2011, relate to the banks’ Irish subsidiaries, Ulster Bank and Bank of Scotland (Ireland) respectively.

The report, by the paper’s economics editor Philip Aldrick, said RBS had paid a total of £7.6 billion (€9.13 billion) to Ulster Bank in capital contributions, in order to safeguard the bank’s capital reserves after writing off billions in impaired loans to Irish borrowers.

Lloyds meanwhile put £6.41 billion (€7.63 billion) into Bank of Scotland in the same period before it ultimately decided to wind down the business. Former BoS loans are now managed by Certus.

The two UK banks between them were bailed out to the tune of £65 billion (€77.4 billion) by the British taxpayer in 2008 and 2009 when the global banking crisis first emerged – with the amount given to Irish subsidiaries making up over 21 per cent of the total.

The amount is separate to the £3.2 billion (€3.8 billion) bilateral loan being offered to Ireland as part of the EU-IMF bailout programme, which also saw Ireland undertake bilateral loans from Sweden and Denmark.

However, the total UK investment in the two banks is still less than the amount invested by the Irish government in six of its own native national lenders, which resulted in all but one – Bank of Ireland – being under majority state ownership.

So far the Irish government has invested €64.1 billion in its own banking sector, taking stakes in Irish banks which in turn have some overseas subsidiaries.

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Gavan Reilly

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