Ireland Gives Its Banks A Massive 50% Haircut In Bad Loan Buyback


Photo: AP

The Irish government has started its massive asset purchase program with a bang.Anglo Irish Bank has had 5 billion euros ($6.75 billion) taken over by NAMA, the National Asset Management Agency, at a 50% discount.

The acquisitions also target other major Irish banks which have been crushed in the country’s economic downturn, including Bank of Ireland and Allied Irish Bank Plc.

65% of all the loans acquired are backed up by property investments. While 58% of today’s acquired loans are based in Ireland, a surprising 38% are backed by British investments.

This is a clear indication of just how adventurous Irish banks were in the already well developed British lending markets during the height of the economic boom.

The government’s aim is to utilise the NAMA program to nationalize the bad assets on bank books encouraging private banks to start lending to the market.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at