UPDATE 1-Irish govt prepares to inject capital into AIB-report

(Adds no comment from Department of Finance, paragraph 5)

DUBLIN, Dec 22 (BestGrowthStock) – Ireland’s government will make
an application to the High Court on Thursday to pump 3.7
billion euros of state cash into Allied Irish Banks (ALBK.I: ),
The Irish Times newspaper reported on Wednesday.

Finance Minister Brian Lenihan has said he will inject
fresh capital into the country’s second-largest lender before
the end of the year to bring its Core Tier 1 capital ratio, a
key measure of financial strength, to 8 percent.

The move will mean the government, which already has a
stake near 19 percent in AIB, will have almost full ownership
of what was once Ireland’s largest listed lender.

Lenihan is using a court application to avoid seeking
shareholder approval for the injection, The Irish Times
reported on its website. It did not cite any sources.

A spokesman for the Department of Finance declined to

The European Commission approved the 3.7 billion euros
capital injection, which will come from the country’s national
pension reserve fund, on Tuesday.

Radical new banking legislation, which was signed into law
on Tuesday, enables the minister for finance to make such a
court application.

Ireland’s government rushed to shore up the banking sector
in the aftermath of a disastrous property bubble but the burden
proved too much and last month Dublin agreed to an 85 billion
euros EU/IMF bailout package to cover its funding costs and
recapitalise the banks.

AIB will be the fourth Irish bank to be brought under state
control and the government is expected to shrink and
restructure the sector next year as agreed under the bailout.

Under the EU/IMF agreement, AIB needs nearly 10 billion
euros to bring its Core Tier 1 capital ratio to 14 percent by
the end of February.
(Reporting by Carmel Crimmins; Editing by Gary Hill)

UPDATE 1-Irish govt prepares to inject capital into AIB-report