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Niall Carson/PA Archive
Another Split?

EU set to call for Irish Nationwide wind-down

Just as with Anglo, Brussels could veto the building society’s plans to reinvent itself and call for its ultimate closure.

THE EUROPEAN COMMISSION is set to call for the winding down and dissolution of Irish Nationwide Building Society (INBS), in a similar tactic to the line it adopted on Anglo Irish Bank.

A report in today’s Sunday Business Post suggests that the building society’s restructuring proposals – which would see it “reinvent itself as a mortgage and savings provider” – would be blocked by the Commission on the grounds of a state influence in fair competition.

INBS has been under public control since the government provided it with a €2.7bn bailout to cover a shortfall in capital.

The newspaper says it believes that the European Commission will seek intensive discussions with the government over its future, just as it did on the subject of Anglo.

The plan to be agreed would see INBS similarly managed to Anglo, with no further lending allowed and its loan book to be held by a separate vehicle.

There is a possibility that instead of splitting INBS into two new smaller entities, however, that its deposit business would be transferred to the funding bank being established by the split within Anglo.

The Commission may, however, also demand that INBS’s mortgage book be sold off immediately in order to hasten the demise – a possibility made more likely by the Irish government’s unease at creating yet another ‘bad bank’ institution further to NAMA and the Anglo recovery bank.

Other strategic options that had been proposed by INBS included a merger with state-owned EBS, which is currently in the process of being auctioned off by the government.