INBS and Anglo Deposits Moving/Auctions

The story continues ...

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t is expected that details regarding the proposed merger of Irish Nationwide Building Society and Anglo Irish Bank, which are to be wound down, will form a major strand of the legislation, with the Government announcing a plan to transfer the deposits of Irish Nationwide Building Society to Anglo Irish Bank.

This deposit book will then be sold off to other financial institutions, most likely AIB and Bank of Ireland.

Anglo Irish Bank and Irish Nationwide are due to submit a joint restructuring plan to the European Commission by the end of January, outlining how both institutions are to be wound down over time.

The impact of the possible transfer of Irish Nationwide’s deposits to Anglo Irish Bank on the employees of the building society is unclear.

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This will need to be handled better than the AIB Bonus saga. I would imagine Anglo will already have a new name when they give the Irish Nationwide worker's p45's and hand over the €4 Billion aprox. deposits.

Looks like the decision will be made in early January 2011:

http://www.reuters.com/article/idUSTRE6BM1WA20101223

Lenihan also said the government would speed up the winding down of nationalized lenders Anglo Irish Bank ANGIB.UL and Irish Nationwide IRNBS.UL.

"We are going to have to accelerate the phasing out of Anglo Irish Bank and Irish Nationwide very early in the new year."

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Move all Deposits to AIB you would imagine now but then E.U. competion rules (yes right) maybe would mean BOI getting some of it.

I would guess that BOI and AIB will get one set of deposits each.

If on a fixed term deposit a/c with Anglo, is this likely to be transferred intact - or will this be broken as part of the transfer process? ie. interest rate maintained on whatever deal was started with Anglo?

If you have a term deposit, then AIB or BOI or whoever will need to honor the terms including the rate.

Looks like there is problems at the NTMA with the move of the deposits.

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There was “a very strong logic” in merging the post-Nama rumps of Anglo and Irish Nationwide, he added.

Moving their deposits was “clearly a challenge” but he was hopeful of retaining them all if moved to “another institution of sufficient quality and repute” with the backing of the Government guarantee.

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The NTMA can forget about retaining 100% of the deposits after they are moved to AIB or BOI or elsewhere. It won't happen.

Probably unlikely but I would like to see my Anglo Deposits moved to An Post investment services.

What guarantee - if any - is there that accounts moved from Anglo and INBS will carry the same terms and conditions, especially interest rates?

Consumers made a choice to transact business with Anglo & INBS on the basis of the prevailing terms and conditions.

Buyer beware on interest rates homeboy. My First Active account taken over by Ulster 2 yrs (or so) ago, resulted in my interest on regular savings dropping from 4% to 2.9% this yr. I only found out when I rang Ulster (they only need to advertise the rate change in national papers). So if the accounts are moved I'd keep an eagle eye on the interest rates given on your deposits.

theresa1 said:

Probably unlikely but I would like to see my Anglo Deposits moved to An Post investment services.

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Very unlikely.

homeboy said:

What guarantee - if any - is there that accounts moved from Anglo and INBS will carry the same terms and conditions, especially interest rates?.

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None for variable rate products.

AIB and BOI will either
(1) force Anglo and INBS depositors to move to their products or
(2) will try and seperate the Anglo and INBS deposits.

Many of the depositors left in Anglo and INBS are rate chasers who do not care a lot about safety. If AIB or BOI take a step wrong with the transition there will be further deposit flights.

CiaranT said:

Very unlikely.



None for variable rate products.

AIB and BOI will either
(1) force Anglo and INBS depositors to move to their products or
(2) will try and seperate the Anglo and INBS deposits.

Many of the depositors left in Anglo and INBS are rate chasers who do not care a lot about safety. If AIB or BOI take a step wrong with the transition there will be further deposit flights.

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But why might consumers be FORCED into something - and who is going to protect consumer interests when Anglo & INBS are wound up?

As regards rate chasers - Anglo & INBS head up the "Best Buys" list on this very site, albeit with a warning!

homeboy said:

But why might consumers be FORCED into something - and who is going to protect consumer interests when Anglo & INBS are wound up?

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INBS/Anglo variable depositor's might be automatically converted to AIB/BOI variable rates. You can obviously walk with your feet.

I might be a 'rate chaser' but I'm also concerned about safety. Anglo is as safe as any Irish Bank.

Well said theresa1. This site gets very exercised over balanced views on the property market. Give your balanced summary on the direction of prices, or be gone. Yet various people here seem to have carte blanche as experts on deposit safety and they are raising doubts over the safety of Irish banks when, as far as I'm aware, they are no more qualified than anyone else to make such statements.

It has reached the point now where ordinary depositors in Irish banks are portrayed as being reckless in some sense.

For one my money remains in Irish banks, I'll take the favourable interest rates while they last and I'm confident that on the balance of probabilities in a year's time I'll have my euro capital sum (ECB will not countenance default on ordinary depositors in the eurosystem). In the process I'm helping in a small way to shore up our country's finances and get us out of this mess.

If you genuinely believe in the sort of scenarios being put across here in some posts, you need to be researching shotguns and beans rather than swiss francs versus australian dollars. Punt nua is the only remotely possible scenario that can be envisaged and I'd like to see how that would be carried through logistically - and if it did we'd have bigger problems as most multinationals shut up shop for our nearest eurozone corporation tax competitor rather than put up with an unstable currency.

Karl Deeter thinks the move of the Anglo and INBS deposits is going to be problematic:

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Anglo/Nationwide deposit books will be auctioned; this may seem like an attractive option for the desperately deposit hungry Irish banks but TUPE19 (Transfer of Undertakings and Protection of Employment) will likely apply meaning the buyer will have a large headache on their hands of having to employ all of the origination staff with the service. The only way to fix that problem is for the banks to rapidly shed staff but they have been unwilling to do this in large numbers to date. Banks are going to push clients toward automated transactions (online/phone/atm based) and use charges to punish branch users as a means to funnel more people away from the branches in conjunction with the closures.

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As Karl points out, Transfer of Undertakings and Protection of Employment, might mean that INBS or Anglo staff will need to move with the deposits. This will add to huge extra cost for the taxpayer.

It might be in everyone's interest if INBS and Anglo deposits are simply returned to the depositor's like what happened in Halifax/BoSI and PostBank.

This needs a dual strategy.

INBS deposits should be returned to their respective owner, the 50 branches closed and all loans moved to NAMA or NAMA II. INBS do not even have electronic banking and their small deposit base is getting smaller. It is not worth the cost in moving the deposits. Close the circus that is INBS ASAP.

Anglo deposits should be moved to IL&P. IL&P have a 260% loans to deposits ratio, and it is probably worse now. Move the remaining deposits to IL&P.

Fair point about INBS deposits. The INBS deposits may only be worth a 3% premium, this 3% premium will probably be eaten up with paper to electronic deposit cost conversation. Agreed, that the best strategy is probably to just return the deposits to their respective depositor.

The latest twist ...

According to today's Sunday Business Post, Cardinal Capital are interested in purchasing Anglo deposits, INBS deposits, PTSB and EBS. Apparently discussions are at "beyond a preliminary stage". In one sweep, the deposits of 4 of the 6 Irish banks could fall into foreign ownership.