The Irish Government has said that it will provide €5.5billion (£5.12billion) to bail out a group of struggling Irish banks, the Bank of Ireland, AIB (Allied Irish Bank), and Anglo-Irish.
In a statement, the Government said that "The objective of these decisions is to ensure that the financial system in Ireland meets the everyday financial needs of individuals, businesses and the overall economy."
The Irish Government will take a 75 per cent stake in AIB after giving it an initial cash injection of €1.5billion, with the option to make further capital injections if required.
"The government's commitment to make further capital available ensures that the bank will continue to be a sound and viable institution," Anglo Irish Bank Chairman Donal O'Connor said in a statement.
Bank of Ireland and Allied Irish will receive €2billion each from the taxpayer via the Government's plans, in the form of preference shares, in return for 25 per cent voting rights on key issues.
The Bank of Ireland
said that "With the benefit of new capital," it is "committed to maintaining a strong lending position" in Ireland's mortgage market.
"The further strengthening of the capital base of Bank of Ireland, with Government support, underpins the ambition of the Group to grow its business in Ireland as it plays an important role in supporting the long-term health and strength of the Irish economy." it said. Allied Irish Bank
said in a statement: "Our endeavours will be strongly influenced by our analysis of market conditions and the pre-emption rights of our shareholders". It intends to raise an additional €1billion from its shareholders.
Bank of Ireland shares have fallen 88 per cent this year, while ABI shares have lost 92 per cent of their value.
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