Anglo Irish Bank Corp. Chairman Alan Dukes said the nationalized lender lost about 12 billion euros ($16.1 billion) of deposits this year, adding to evidence of an outflow of funds from the country’s financial system.
Deposit outflows have “stabilized” in recent weeks, Dukes said in an interview with Bloomberg Television in Dublin today. Anglo Irish had 27.2 billion euros of customer deposits at the end of 2009, according to its annual report.
“Other banks are having similar problems,” said Dukes. Irish deposits could be helped “by decisive action on the banks,” he said.
Ireland is in talks with the European Union and the International Monetary Fund on an 85 billion-euro aid package as the authorities seek to avoid the nation’s financial crisis spreading to Portugal and Spain. Irish Finance Minister Brian Lenihan said yesterday that the nation’s banking system is safe as the outflow of deposits from lenders has been “gradual.”
Deposits at Bank of Ireland Plc and Allied Irish Banks Plc have fallen by a combined 22 billion euros since the end of June, according to estimates from Emer Lang, an analyst at Dublin-based securities firm Davy.
Irish banks’ reliance on emergency European Central Bank liquidity rose 7.3 percent to 130 billion euros in October, Ireland’s central bank said on Nov. 1. ECB reliance is “at a level that cannot be sustained indefinitely,” Dukes said.
The total cost to the state or rescuing Anglo Irish should “be nearer to the lower end” of the 29.3 billion-euro to 34.3 billion-euro range outlined by Lenihan on Sept. 30, Dukes said.
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