Press Release 31 May 2011
Tá an preasráiteas seo ar fáil as gaeilge chomh maith
The Central Bank of Ireland today published an addendum to the Financial Measures Programme Report detailing the results of an independent review of Anglo Irish Bank (‘Anglo’) and Irish Nationwide Building Society (‘INBS’).
This review, completed by BlackRock Solutions (‘BlackRock’), and assessed by The Boston Consulting Group, has sought to develop an independent view on the loss estimates that were used in the last capital estimation exercises for Anglo and INBS. These exercises were the key drivers of the previous requirements for additional capital. Each institution has been assessed separately.
Irish Nationwide Building Society (INBS)
The approach for INBS is similar to the process used for AIB, Bank of Ireland, EBS and Irish Life and Permanent in March 2011. This is because an independent review of INBS’s portfolio had not been performed for over a year.
The loan loss assessment models for INBS covered the residential mortgages, commercial real estate lending and non-mortgage consumer and other lending portfolios. BlackRock has applied detailed loan loss forecasting models, based on lifetime loss forecasts, to analyse the INBS loan portfolios as of 31 December 2010.
This assessment has concluded that the loan loss forecasts, which were estimated for the capital calculation of INBS last September, remain robust.
Anglo Irish Bank (Anglo)
For Anglo, the Central Bank decided, with the agreement of the External Partners[1], that recent reviews[2] were current enough to deem a full BlackRock exercise unnecessary. The Central Bank oversaw these reviews at the time. In addition to that work, BlackRock has performed an assessment of the loan loss estimates prepared for the previous capital assessment exercise to form an opinion on the reasonableness of the approach and the results.
The conclusion of this work is that the previous results remain reasonable and within the ranges BlackRock derived from its analysis.
[1] EU, IMF and ECB
[2] The earlier reviews were conducted by PwC for the Department of Finance and Central Bank and by Anglo management (with material assistance from an outside consultancy firm).