This site uses cookies to improve your experience and to provide services and advertising. By continuing to browse, you agree to the use of cookies described in our Cookies Policy. You may change your settings at any time but this may impact on the functionality of the site. To learn more see our Cookies Policy.
OK
Dublin: 6 °C Wednesday 8 April, 2020
Advertisement

Banks repay €3.3 billion in fees from State guarantee schemes

New figures show the seven banks covered by the State’s guarantees have returned €3.36 billion so far.

Image: Brian O'Leary/Photocall Ireland

THE SEVEN IRISH banks covered by the two guarantee schemes introduced by the government in 2008 and 2009 have so far paid €3.36 billion in fees to the Exchequer, new figures have shown.

Figures released by the Department of Finance show that over €750 million has been paid in fees by seven institutions which were covered by the blanket guarantee introduced in September 2008 and which ran for two years.

The other €2.6 billion has been paid under a second guarantee, the Eligible Liabilities Guarantee scheme, under which the State also agreed to guarantee new deposits and any newly-issued bonds within a certain period. That scheme remains in place.

Around half of the fees accrued from the latter scheme were collected in 2011, when AIB paid fees of €465 million and Bank of Ireland €449 million.

Fees from the scheme have slowed slightly since then, with about €515 million paid to the State so far this year – again, with AIB and Bank of Ireland making up the lion’s share at €205 million and €189 million respectively.

The Irish Bank Resolution Corporation, the institution formed by the merger of Anglo Irish Bank and Irish Nationwide, has paid a total of €251 million under the ELG scheme.

Bank of Ireland and AIB are again the largest contributors under the previous blanket guarantee, having paid €239 and €233 million in the lifetime of that scheme. Anglo paid €188 million, while Irish Nationwide contributed €33 million.

EBS Building Society – now a subsidiary of AIB – paid €15.6 million, while Irish Life & Permanent paid a total of €50.2 million. Postbank, the financial services arm of An Post, paid €39,000.

Aside from the fees for being covered under the schemes, the banks have also paid a total of €5.35 million to cover the State’s administrative and legal costs.

The State has spent a total of €64.1 billion recapitalising the banking sector, including a total of €20.7 billion on the now-defunct IBRC. Some of that amount has been converted into shares in each institution, which could be sold on – possibly to the new Eurozone bailout fund – at a later point.

The transactions are largely circuitous, given that the State now almost fully owns each of the institutions covered by the guarantee. The only exception is Bank of Ireland, in which the State owns a 15.1 per cent stake. AIB is 99.8 per cent owned by the taxpayer.

The figures were released in response to parliamentary questions from Labour’s Joanna Tuffy.

  • Share on Facebook
  • Email this article
  •  

About the author:

Gavan Reilly

Read next:

COMMENTS (9)