Anglo Irish May Hand Back Capital to State, CEO Aynsley Says

Anglo Irish Bank Corp., whose lending to real-estate developers helped drive the country’s financial system to the brink of collapse, may hand capital back to the state as it winds down within a decade.

Speaking to reporters in Dublin today, Chief Executive Officer Mike Aynsley said he expects the final bill for rescuing the bank will be between 25 billion euros ($36.1 billion) and 28 billion euros. The government poured 29.3 billion euros into Anglo Irish since nationalizing the lender in January 2009.

The government is moving to close the bank by 2020 after its rescue contributed to the state having to see an international bailout last year. The bank is selling assets, with Aynsley saying an auction of its U.S. loans has drawn “enormous” interest.

“We are only interested in sales that will not require more capital injections,” Tom Hunersen, head of corporate development, told reporters today. He said the bank will work through its loans “intelligently.”

JPMorgan Chase & Co. and Wells Fargo & Co. are among banks that made final bids to buy portions of its $9.65 billion U.S. real-estate loans, said three people with knowledge of the sales yesterday.

Hunersen said he’s “increasingly optimistic” that the sale will be concluded by the year end and the bank is now start to tell winning and losing bidders of the outcome.

Yield

Irish bonds have rallied over the past month, partly on optimism that the government has now drawn a line under the banking problems. The difference in yield between Irish and German 10-year bonds has narrowed 474 basis points, or 4.74 percent, since rising to a record 1,143 on July 18.

Anglo Irish’s first-half net loss narrowed to 105 million euros from 8.2 billion-euro in the same period last year, it said today. The year-earlier figure included a 3.5 billion-loss on the loans Anglo sold to the National Asset Management Agency and a separate loan loss impairment charge of 4.85 billion euros.

-- With assistance from Jonathan Keehner and Sarah Mulholland in New York. Editors: Dara Doyle, Rodney Jefferson

To contact the reporter on this story: Joe Brennan at jbrennan29@bloomberg.net

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