Lloyds, RBS using taxpayer funds to bail out Irish banks
01.10.09
Political fury was mounting today after it was revealed that the taxpayer-owned banks Lloyds and Royal Bank of Scotland have pumped almost £2.8 billion into their Irish offshoots over the past 10 months.
RBS's Ulster Bank (ROI) has received four capital injections totalling some £1.44 billion while Lloyds' Bank of Scotland (Ireland) has received two injections totalling £1.32 billion. The capital injections are largely needed to bail the Irish subsidiary banks out of bad loans made to Irish property developers at the height of the Celtic tiger boom. Many of those loans have had to be written down heavily.
Vince Cable, Liberal Democrat Treasury spokesman, said: “Many will find it hard to understand why British taxpayers are bailing out bad investments made in Ireland. This clearly shows that these banks are far from out of the woods.”
And Brian Lucey, finance professor at Trinity College, Dublin, said: “The scale of the figure is quite shocking. These were not leaders in the Irish market. The figure just shows the level of clean-up needed.”
The taxpayer holds a 70% stake in RBS — which got a £20 billion bail-out — and a 43% stake in Lloyds which received £17 billion.
UK Financial Investments which manages the Government's stakes in the banks told Bloomberg News that it would “not intervene in operational management decisions”.
RBS and Lloyds could not comment on whether the two banks expect to have to transfer further capital to their Irish businesses.
Reader views (3)
No mention of Irish tax-payers guaranteeing UK depositors in Irish Banks in UK??
Full story would give balance!! Playing to the gallery indeed.
- Patrick, Dublin , Ireland
Surely RBS Ulster's bank is a UK bank- that is one that cover England, Scotland Wales & Northern Ireland!
Is Cable now claiming that we shouldn't help NI?
- Bob, London
This is Vince Cable playing to the gallery surely?? Any bank in the world that has been bailed out in any shape or form will be involved in cross border trade/loans - so there will be plenty of foreign governments bailing out their indigenous banks that have bad loans originated in the UK - so what is Vince's point?
- Paddy, London
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