Main Irish banks’ deposit position improving: Finance Minister

DUBLIN (Reuters) – The net deposit position of Allied Irish Banks and Bank of Ireland — the country’s so-called “pillar banks” — has improved significantly since last week’s bank recapitalization announcement, Ireland’s finance minister said on Wednesday.

Irish banks have been hemorrhaging deposits as Ireland’s banking crisis continued to rumble and there was an underlying decline of almost 1.8 billion euros ($2.5 billion) in Irish private sector deposits last month.

“The total amount of deposits withdrawn from the pillar banks has been very significantly reduced. Since Thursday’s announcements, the net deposit position of the pillar banks has improved significantly,” Michael Noonan told parliament.

Noonan added that the total impact on the country’s gross debt of recapitalizing Irish banks by 24 billion euros may not exceed 2 billion euros, or 1.5 percent of gross domestic product (GDP), owing to proposed burden sharing with junior debt holders and private capital raising.

(Reporting by Padraic Halpin; editing by Elaine Hardcastle)

Main Irish banks’ deposit position improving: Finance Minister