Splitting Anglo 'the best option'

Anglo Irish Bank faces "horrendous" losses on loans transferring into Nama and splitting the company is its best option, an Oireachtas…

Anglo Irish Bank faces "horrendous" losses on loans transferring into Nama and splitting the company is its best option, an Oireachtas committee was told today.

The estimate for the Anglo Irish's capital needs hasn't changed since March, when the Government said the lender would need a €22 billion capital injection, chief financial officer Maarten van Eden told the Joint Committee on Finance today.

Mr Van Eden said the cost of winding down the entire company over a year would be about €42 billion.

Chief executive Mike Aynsley said splitting the lender into a "good" and "bad" bank is the "only scenario that offers any payback" to the Government.

The proposed good bank would have between €13 billion and €15 billion of assets, he said. The remaining bad bank would manage a further €20 billion, which has been written down to €13.5 billion.

Anglo Irish, which bankrolled many of the property developers during Ireland's building boom, in March reported a €12.7 billion loss for the 15 months today December after setting aside €15.1 billion for toxic property loans.

The government has pledged €14.3 billion to the bank, which was nationalised last year, and estimates it needs a further €8 billio.

Anglo Irish is transferring about €35 billion of assets to the National Asset Management Agency.

The bank is also under investigation by the Office of the Director of Corporate Enforcement, the Garda and the Financial Regulator over loans to directors.