Ireland Hikes Insolvent Bank Funding, To Acquire Another €12 Billion In Bank Loans, Brings Total Discount On Loans To 58%

Tyler Durden's picture

Remember when in December, to much fanfare, the Irish bail out was announced, which included a package of €85 billion financed by everyone, up to an including the country's Pension fund (the NPRF)? Well, less than two months later, it has become clear that the funded component is woefully low as the true extent of losses is starting to be appreciated. According to the Irish National Asset Management Agency, the country's two key insolvent banks will need a fresh infusion of €12 billion. What this means is that as a result of current estimate of full pay outs by NAMA, the property loans underwritten by the banks, are now being discounted by a ridiculous 58%! For the captcha challenged, this means a more than half write down on loans. And Ireland is solvent how again? At least the country's pension funds are being depleted to fund a good cause: banker (read senior bondholder) well-being...

From Reuters:

Ireland's National Asset Management Agency (NAMA) will acquire additional loans with a nominal value of 12 billion euros from Allied Irish Banks (ALBK.I) and Bank of Ireland (BKIR.I), the state-run group said on Wednesday.

Under an EU/IMF bailout deal, Ireland agreed to extend its purge of risky commercial property loans from lenders to include land and development loans valued at under 20 million euros from its two main banks.

The government had previously said the nominal value of such loans would be under 16 billion euros.

NAMA said on Wednesday that at the end of its purchase programme it will have spent 37 billion euros acquiring loans with a nominal value of 88 billion euros, meaning that it discounted the loans, written during a disastrous property bubble, by 58 percent

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hugovanderbubble's picture

And Portugal, Belgium, Spanish Forgiven debt schemes...

DILLUTIVE For banks....



Cursive's picture

At least the country's pension funds are being depleted to fund a good cause: banker (read senior bondholder) well-being...

I propose the Danish solution:

MonsterBox's picture

or the Iceland solution: let the banks and their overseas depositors lose their bets/deposits.

sure, Iceland hit bottom, but their taxpayers did not pay-off the banksters and now their country is growing.  Can any other effected economy claim/prove that?

(sure, the US can "claim" improvement, green-shoots, etc... but look around)

jus_lite_reading's picture

I told you so. Now, China I ask again- did you get the memo?

Racer's picture

This is truly obscene and unjust that people worked ALL their lives for their pension and now it is stolen from them to pay banksters bonuses.

I really don't know why they aren't rioting in the streets by now

THE DORK OF CORK's picture

Because there is two sides to every housing bubble - the buyer and seller , all that obscene bank credit also filled deposits and they happened to be in Euros.

They are stupidly prepared to do anything to preserve this "wealth".

Unlike the Icelandic Krona which was devalued to a extreme level - this gave the middleclass nothing left to lose.

Anyhow the young are leaving and the old remain with their deposits - they will not riot.

Ireland is incapable of putting those deposits to work as its culture relies on outside credit to get anything done - this could very well be a slow decay.

This is what happens to a society with little internal wealth and therefore it opens itself up to vast capital and subsequent labour flows , this is not new to Ireland.

We were the prototype.

gwar5's picture

Can the new parliament still reverse this?

Looks like a test case for a USA revolt against bankser hegemony.

Go Celts.

tonyw's picture

"Can the new parliament still reverse this?" Yes, because a parliament can make and repeal laws!

oogs66's picture

It seems insane to bring down an entire country fighting off the problems of the banks.  I don't understand why they wouldn't be better off letting them die and picking up the pieces in a nationalized form. 

The Axe's picture

The Irish banks must be buying RL shirts and yoga outfits from LULU...

youngman's picture

What is amazing to me is that no one has been arrested..charged..gone to jail....only Bernie.....all the players have retired or are still at the feeding trough.....incredible....a two month tell me what are we supposed to believe....???????

Dick Darlington's picture

Yday the chairman of Anglo Irish said that he sees 50bn more in losses for the banking sector. These must be the "unexpected future losses" Fine Gael was talking abt last week when they said they want Eurozone taxpayers to guarantee those said " potential totally unexpected losses".

tonyw's picture

"unexpected future losses"  who could have possible seen it coming? /sarcasm off

Dick Darlington's picture

Yeah, after so many times the "unexpected future losses" have become reality in so narrow timeframe how could anyone see there's actually problems in the balance sheets of these fraudulent lenders... Beats me...

But do not worry here comes the knight in shiny armor to save the day:

02-09 11:39: Irish Finance Minister says without further capital injections these banks are adequately capitalised Tadaa, all is well! /sarc off
beastie's picture

Unbelievable. This is akin to me telling my neighbor I'll stop by next week to rob his house, kick him in the nuts and it's for his own good.

Miss Expectations's picture

Tyler, easy on the "captcha challenged" talk.

-.58 doesn't work.

pods's picture

This makes perfect sense to me.  You have to first get the camel's nose into the tent.  So they low ball the estimate for the cost, then ramp it up over time.

Or as amerikans like to say, you put the frog into the pot, then turn up the heat to boil it.


bunkermeatheadprogeny's picture

If they just closed the pubs for one day, the Irish would get off their stools and start acting like Egyptians.

cranky-old-geezer's picture

"At least the country's pension funds are being depleted to fund a good cause: banker (read senior bondholder) well-being..."

Coming to a nation near you.

Pension funds and government-sanctioned retirement accounts (401k, IRA, etc) are going to be confiscated and given to banksters.

It will happen by direct confiscation, assets taken and (worthless) "government guaranteed annuity" left in their place.

Said "government guaranteed annuity" will be worthless becasue it's dollar-based and endless money printing will debase the dollar to near-worthlessness ...or complete worthlessness... by the time the person retires and begins using that "government guaranteed annuity".

Same is true for any dollar-based asset held over time. Endless money printing is going to debase the dollar to near worthlessness or complete wothlessness.  The dollars will still be there but they won't have any purchasing power. 

This is exactly what BenLiquidator said his long-term game plan is. Gradually debase the dollar to nothing, completely worthless.

People refuse to believe it would happen.  But it's been happening since 1913.  The Fed has gradually been reducing the value of the dollar.  Today the dollar is worth about 3 cents compared to 1913.   BenLiquidator plans to finish the job, take the dollar down to 0 cents.

This is the real reason BenLiquidator has been printing money like crazy and giving it to his cronies (fellow banksters) here in America and around the world.

Bailing out his bankster buddies does two things, (a) giving BenLiquidator a reason to run the printing presses full speed, needed to debase the dollar, his long-term plan, and (b) transfer America's wealth to his bankster buddies here in America and around the world ...the real reason the Fed was created.

Yes, we'll see Dow 35,000 eventually.  By then the dollar will be nearly worthless.  Bread will be $12 per loaf, gas will be $15 per gallon.

You'll need $7,000 per month to stay above poverty level, $15,000 per month to be "middle class". 

If you're retired your "government guaranteed annuity" will be paying about $2,000 - $3,000 per month ...which includes cost-of-living increases based on "official government inflation estimates".

Yes, the dollar will be nearly worthless eventually, but his bankster buddies will have TRILLIONS of them, even QUADRILLIONS, thanks to QE-3, 4, 5, 6, 7, ... 51, 52, ... 99, 100, 101 get the picture. 

We're already up to QE-5 thereabouts.  You just haven't heard about them.  They happen behind the scenes, out of sight, unreported. 

Buck Johnson's picture

What happened to the 25% in GDP money that was printed up by Ireland in Euros.

Artful Dodger's picture

"...depleted to fund a good cause: banker (read senior bondholder) well-being..."


Did democracy ever exist? The events of the last three years are so clearly indicative of who really holds power within our societies that history and political science and economics textbooks will need to be re-written. Well, they would need to be, if there was any such thing as truth and justice guiding their writing. None of these exist, and history is written by the winners, as they say--which means these bankster fucks have a lot of late nights ahead of them. What a fucking joke. At this point I'd be moving banksters ahead of murderers on death row. Murderers don't destroy societies and widespread ethical norms. I've had it, and all I can do is post another comment [that no one will read cuz it's too far down the blog]. They win.