# IBRC Liquidation: What Happens to Deposit Holders?



## Lightning (6 Feb 2013)

So the big news today is the liquidation of IBRC. 

Some time ago, most Anglo deposits moved to AIB and INBS deposits moved to PTSB. Most, not all. 

As at 30 June 2012:


> While most of IBRC’s deposit book has been transferred to AIB, its most recent accounts from June 2012 showed *surviving deposits of €518 million* – including €11 million repayable on demand and another €507 million lodged by customers with agreed maturity dates.



So around €518 million, in mainly locked term deposits, is still held with IBRC. 

I can't find any report online, thus far, as to what is going to happen to those deposit holders.

Will AIB and PTSB do a second migration of deposits? or is the ELG and Deposit Protection Scheme both about to be called upon? Anyone know?


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## Lightning (7 Feb 2013)

Wow. The Deposit Guarantee Scheme (DGS) and the Eligible Liabilities Guarantee [broken link removed] for the first time ever. 

It might take weeks for payment from the guarantee schemes. 



> The Central Bank has said it will arrange the repayment of deposits,  up to a limit of €100,000 per person, to eligible depositors at IBRC.
> 
> 
> The  appointment of a special liquidator to IBRC triggers the Deposit  Guarantee Scheme (DGS) and the Eligible Liabilities Guarantee for the  remaining depositors at IBRC.
> ...


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## Brendan Burgess (7 Feb 2013)

Ciaran

That is really interesting. So some depositors are going to lose out? 

Brendan


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## Lightning (7 Feb 2013)

Hi Brendan, 

It is very interesting. 

Nobody is going to loose any money. Depositors will be compensated from 2 different sources. It just might take weeks.

Amounts under 100,000 EUR will come from the Central Bank of Ireland via the Deposit Guarantee Scheme. 

Amounts over 100,000 EUR will come from the Eligible Liabilities Guarantee via the Department of Finance/Irish Government.


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## Lightning (7 Feb 2013)

Here is the steps you need to do [broken link removed]. 

1) *Cheque will be sent by the CBI for amounts under 100,000 EUR*


> To the degree you are covered by the Deposit Guarantee Scheme (DGS) no action is required as the Central Bank will make payments directly by cheque for the first €100,000 of eligible deposits.



2)  *A claim must be made for amounts over 100,000 EUR*


> To the degree your deposit was above €100,000 (€200,000 for two individuals holding a joint account) or not covered by the DGS, you should claim the excess from the ELG Scheme.
> 
> The claim form and guidance for depositors (current accounts and deposit accounts) is available in [broken link removed]


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## Lightning (8 Feb 2013)

The Irish times today says [broken link removed]. How is this possible when the last set of accounts had deposits at 0.5 billion? Surely, deposits are going down at IBRC and not up?

Also, deposits are going to be netted against loans. 



> In some cases, the liquidators Kieran Wallace and Eamonn Richardson, will be able deduct money due against the companies’ loans from the amounts that they have on deposit. This will apply only where the formal agreement between the bank and the client allows it.
> 
> The ELG is specifically designed to compensate larger businesses and clients who have over €100,000 on deposit. Organisations due payment from this fund have to apply to the NTMA for the cash.



A refund of your deposit will take up to 20 days. 



> Payments due to anyone confirmed to be entitled to payment under this scheme will be made automatically within 20 days of the liquidators’ appointment.


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## ClubMan (8 Feb 2013)

Of the remaining deposits what portion are personal deposits? I read somewhere that the vast majority of the remaining deposits are commercial. I can't remember what happened during the transfer of deposits to _AIB _but I don't recall any option to object and stay put.


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## Lightning (9 Feb 2013)

The majority of deposits at IBRC appear to have been corporate deposits. Most. Not all. 

Yeah, there was no option to stay put when the migration happened. You were either moved or not moved. Most peoples deposits were moved. The main criteria, as to whether your deposit is moved or not, seems to have been if you had also had loans with IBRC or not.


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## Lightning (18 Feb 2013)

Looks like some depositors will be burnt after all. 

NAMAWineLake has an excellent article on the fact that depositors may be subject to 93 million EUR in cuts. 

There were €323m in deposits as at liquidation date.

5 things can happen:

(1) A certain payment needs to be made by the CBI via the DGS.
(2) A certain payment needs to be made by the NTMA via the ELG.
(3) A ‘haircut’ may occur via loan/deposit netting.
(4) A haircut may occur via deposits over 100k formally covered by the CIFS that were opened pre September 2008.
(5) A haircut may occur via deposits of large companies as small companies are only covered by the DGS.

Therefore:

(1) €30 million compensation by the CBI.
(2) €200 million compensation by the NTMA.
(3) May not be defined as a ‘haircut’ as it has been netted with a loan haircut as well. 
(4) The longest length of time that Anglo Irish Bank sold term deposits for was for a 5 year term. Anglo were not competitive in the market for long dated term deposits, even in 2008. Hence, a depositor would need to have (A) opened a 5 year term deposit as all other terms would have expired by now and (B) accepted a low rate and (C) opened the 5 year term deposit between February 2008 and 28 September 2008 during the early stages of the crisis and (D) made no early withdrawal since then which you can do subject to exit penalties and (E) opened the deposit for over 100k. I find it really difficult to understand how anyone in 2008 would have opened a low rate long dated term deposit for a large deposit at Anglo during the crisis and not looked for their money back since then. 
(5) What/which large company would keep excess deposits at IBRC in non protected accounts!?

I had not fully considered the impact of these situations properly with (4) and (5) as I saw the risk of occurrence as being remote but clearly the reality is that the amounts in these categories are far from negligible.


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## Lightning (26 May 2013)

Central Bank of Ireland, deposit compensation update ...

[broken link removed]



> The Deposit Guarantee Scheme (DGS) has made further compensation payments totaling €920,527 to 29 depositors of IBRC Limited, which was placed in liquidation on 7 February 2013. The DGS has made total compensation payments of €10.5 million to 623 depositors to date.
> 
> The Special Liquidators continue to review deposits held by customers who also hold loans, to establish if a right of set off applies.
> 
> These investigations may identify additional accounts which qualify for DGS compensation and further payments will be made in due course.



Also, todays Sunday Times reports that those that had investments with IBRC may be able to claim compensation from the Investors Compensation Scheme.


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