THE STATE will own Irish Nationwide Building Society (INBS) following its planned injection of €2.7 billion into the society.
The transfer of the initial tranche of loans from Irish Nationwide Building Society (INBS) to the National Asset Management Agency (Nama) was completed on Monday. The discount – or “haircut” – that applied is the highest of the five Nama institutions, reflecting the higher level of write-offs on the commercial property loans advanced by INBS.
The original value of the first tranche to move was €670 million. However, Nama paid just €280 million, meaning that an average discount of 58 per cent was applied. The original value of the loans to be transferred from INBS is €9 billion. The State will inject €100 million into INBS through the issuance of Special Investment Shares, which will give it ownership and control of the society.
The Financial Regulator said the building society would need an additional capital injection of €2.6 billion to remain compliant with its regulatory requirements.
It will issue a promissory note for €2.6 billion, which will give the building society “a small buffer”. The money will be paid to INBS over a period of 10-15 years.
The Nama transfers will leave INBS with a loan book of €2 billion. Minister for Finance Brian Lenihan said the Government would prioritise its swift sale or integration with another entity.
