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The IBRC gave A LOT of commercial borrowers really good interest rates

A parliamentary question has revealed that as many as 40% of commercial loans had interest rates of less than 2%.
Jun 26th 2015, 5:34 PM 8,399 55

MORE THAN 1,000 loans given by the IBRC came with interest rates of less than 2%, new information has shown.

It has been shown that 166 loans by the IBRC had an interest rate of less than 1%, while a further 920 loans, with a collective value of €8.6 billion, had an interest rate of between 1% and 1.99%.

This covers 40% of commercial loans owed to the IBRC and relates to the time when the special liquidator was appointed to the bank.

This information comes in response to a parliamentary question asked by Fianna Fáil’s spokesperson on economics Michael McGrath to Finance Minister Michael Noonan.

European Union International Monetary Fund Bailouts Fianna Fáil finance spokesperson Michael McGrath Source: Photocall/Sam Boal

The information provided gives an overview of the €22 billion in loans owed to the IBRC when the special liquidator was appointed in February 2013.

In a statement on the findings, McGrath said, “It is striking that €9bn of loans – over 40% of the total – had an interest rate of less than 2%.”

On the face of it, the interest rates seem to be extraordinarily low and it will need to be established whether these rates relate to historic loan agreements entered into by the old Anglo Irish Bank or whether they reflect decisions made by management since the bank was nationalised in 2009.

breakdown of interest rates How the loans by the IBRC broke down when the special liquidator took over in Feb 2013 Source: Michael McGrath TD

The Cork-based TD went on to say that many mortgage holders (who generally pay between 4% and 5%) and SMEs (who find themselves paying as much as 7% or 8%) would find these rates “mouthwatering”

The matter has been referred to Judge Daniel O’Keeffe who is chairing the commission of investigation into the IBRC and whose duties include examining any preferential interest rates that might have been given.

Read: KPMG are charging a lot of money to liquidate IBRC…

Also: From 1997 to 2015: Comparing a pre-Celtic Tiger liquidation to recession company busts

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Michael Sheils McNamee

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