UPDATE 1-Ireland injects 2 bln euros into Anglo Irish Bank

* Cost to exchequer spread over up to 15 years

* Needs more capital after fresh losses on loans

(Adds comments from minister, background)

DUBLIN, May 31 (BestGrowthStock) – Ireland’s government has pumped a
further 2 billion euros ($2.5 billion) of capital into
nationalised Anglo Irish Bank [ANGIB.UL], on top of 12.3 billion
already supplied, to make up for fresh loan losses.

The finance ministry said the fresh injection was part of
the 10 billion euros of extra funds Finance Minister Brian
Lenihan said in March the bank could need.

Anglo Irish, which was taken over after it was heavily
exposed to the property market crash and also suffered a series
of loan and deposit scandals, represents the biggest banking
burden for a state already grappling with one of the euro zone’s
biggest debt problems.

To minimise the impact on the exchequer, Lenihan is
injecting the capital in the form of a promissory note, payable
over a period of up to 15 years, he said.

The need for the fresh capital arises because Anglo Irish is
getting a lower price for loans sold to the National Asset
Management Agency (NAMA), Ireland’s “bad bank” scheme, than
earlier expected.

Further impairments on the part of its loan book remaining
after the sales of its property loans to NAMA is also leading to
an additional capital requirement, Lenihan said.

Anglo Irish was submitting its restructuring plan to the
European Commission on Monday, Lenihan said. According to
earlier statements, it was expected to explore options of
splitting the bank in two and an alternative of winding it down
over time.

“The future of the bank will be determined by those
discussions,” Lenihan said in a statement. “The overriding
objective of the government is to minimise the cost to the
taxpayer of the restructuring of Anglo Irish Bank.”

Earlier on Monday, the EU approved a one-month extension to
Ireland’s separate guarantee scheme for bank liabilities, of
which Anglo Irish is one of the beneficiaries and which is an
additional source of risk. [ID:nLDE64U1LS]

Investing Basics
(Reporting by Andras Gergely; Editing by Patrick Graham and
David Holmes)
($1=.8163 Euro)

UPDATE 1-Ireland injects 2 bln euros into Anglo Irish Bank