Closing bank 'would be unwise'
Former Finance Minister Alan Dukes is to take over as the new chairman of nationalised Anglo Irish Bank
Friday March 12 2010
The incoming head of state-run Anglo Irish Bank said allowing the institution to go under would cost taxpayers more than the billions the Government is spending to keep it open.
Chairman and former Finance Minister Alan Dukes said it would cost more than 20 billion euro to shut the lender's doors for good.
"That's not something that would be wise to do now," he said.
Mr Dukes, who is expected to take over from Donal O'Connor in July, said keeping the bank afloat through recapitalisation, sorting bad loans and moving the institution towards a business bank, would cost much less in the long run. He was unable to say how long it would take to repair the bank.
"Closing the bank down immediately would hit the taxpayer to a much bigger extent than maintaining the bank operations, producing a viable business bank, which could, if things work out well, be refloated into the private sector with perhaps a net gain to the taxpayer," he said.
Anglo's annual report is due out before the end of the month.
Mr Dukes added: "Closing the bank down at this point would crystallise losses which could otherwise be spread over a period of years and would not allow us then to build on this more viable commercial bank end."
The senior management change was announced after Anglo on Thursday issued legal action against former chairman Sean FitzPatrick to recover loans of 70 million euro.
Mr Dukes said the case was being treated in the same way as any other debt.
"The bank will take whatever measures it can to maximise the return. There are cases where it will not be possible to recover all the money owed."
