TIMELINE-Ireland’s string of bank bailouts

DUBLIN, March 31 (Reuters) – Ireland will publish what is
meant to be the final bill for propping up its banks on Thursday
in a last-ditch bid to convince investors it can avoid deepening
Europe’s debt woes with a damaging restructuring.

Over 20 billion euros more is expected to be pumped into the
banks, effectively nationalising the entire financial system,
but whether it draws a line under the banking crisis will depend
on whether the ECB gives further support and investors believe
this is truly the final bill.

Here is a timeline of events:

Sept. 30, 2008 – Just days after becoming the first euro
zone country to slide into recession, Ireland becomes one of the
first to respond to the Lehman Brothers collapse, guaranteeing
440 billion euros of liabilities at six Irish-owned institutions
and a foreign-owned bank.

Finance Minister Brian Lenihan boasts a month later it would
be “the cheapest bailout in the world” and it prompts similar
moves across Europe to prevent capital flooding to Ireland.

Dec. 21 – The government says it will inject 5.5 billion
euros into the country’s three main lenders and will also
underwrite Bank of Ireland (BKIR.I: Quote, Profile, Research) and Allied Irish Banks
(ALBK.I: Quote, Profile, Research) plans to raise 1 billion euros each.

Jan. 15, 2009 – Ireland abandons plans to inject 1.5 billion
euros into third largest bank Anglo Irish Bank [ANGIB.UL] and
nationalises the commercial lender amid fears it could collapse.

Feb. 11 – Ireland says it will inject 7 billion euros into
Bank of Ireland and Allied Irish in return for guarantees on
lending, executive pay and mortgage arrears. It gets a 25
percent indirect stake in both banks.

April 7 – Lenihan announces the creation of a “bad bank” to
deal with the risky property loans of financial institutions.
The National Asset Management Agency (NAMA) is established six
months later, ready to take assets worth a nominal 77 billion
euros at an average discount of 30 percent.

May 29 – Ireland is forced to inject up to 4 billion euros
into Anglo after its loan book sours and drags the bank to a
half-year loss of 4.1 billion euros, at the time the worst loss
in Irish bank history. It manages to more than treble that
record within two years.

Feb 19, 2010 – The government takes its first direct stake
in Bank of Ireland, taking over 16 percent of the lender in lieu
of a payment due on the 25 percent indirect stake it held.

March 30 – NAMA buys a first batch of loans at an average
discount of 47 percent — requiring lenders to raise more
capital to absorb losses than previously envisaged.

The central bank also demands that lenders hold a minimum 8
percent of core Tier 1 capital by the end of the year. It sees
Ireland take control of Irish Nationwide building society
[IRNBS.UL] with a promised capital injection of 2.7 billion
euros. Dublin pumps another 8.3 billion euro into Anglo, and
says it may need another 10 billion euros.

May 13 – The government takes an 18 percent stake in AIB
after it, like Bank of Ireland, is prohibited by an EU ruling
from settling a coupon payment on the government’s 3.5 billion
euros preference shareholding in cash.

June 9 – The state’s Bank of Ireland stake rises to 36
percent after a 3 billion euro capital raising, reaching the
central bank’s capital ratio target with six months to spare.

Sept. 30 – After weeks of speculation over how much Anglo
will cost the state, helping push Irish borrowing costs to euro
lifetime highs, the central bank estimates the final bill could
be as high as 34.3 billion euros, up from 22.3 billion.

Dublin puts another 2.7 billion euros into Irish Nationwide,
doubling its state aid, and tells AIB, EBS and Bank of Ireland
they need to raise even more capital. It says it will take a
majority stake in AIB.

Nov. 29 – Prime Minister Brian Cowen signals junior
bondholders at Ireland’s top two banks should expect to share
some of the pain, as public anger builds with calls to “burn the
bondholders”. Ireland ruled out forcing holders of bank senior
debt to take a hit, however.

Dec. 15 – The government tops up an earlier 350 million euro
capital injection into EBS [EBSBS.UL] by pouring an extra 525
million into the building society.

Dec. 23 – Ireland effectively nationalises AIB with a 3.7
billion euro capital injection, giving it a 93 percent holding
once the bank completes the sale of its Polish interests to
Spanish group Santander (SAN.MC: Quote, Profile, Research). As part of Ireland’s 85
billion euro IMF-EU bailout, the bank still needs a further 6.1
billion euros of core tier 1 capital.

Feb. 9, 2011 – The outgoing government shelves plans to
inject up to 10 billion euros into banks until after an
election, throwing down a challenge to opposition parties who
want bondholders to shoulder more of the cost. The new
government then delays the cash injection until the release of
stress tests results on March 31.

(Reporting by Padraic Halpin; editing by Patrick Graham)

TIMELINE-Ireland’s string of bank bailouts