Ireland confirms €24bn bank funding hole

Ireland’s four main banks have a €24bn gap between their current and ideal capital positions, the Financial Measures Programme Report has concluded.

Announcing the results of its banking stress test, the Central Bank of Ireland says that Allied Irish Banks, Bank of Ireland, EBS and Irish Life & Permanent will have until 2013 to build the required reserves.

AIB has been asked to contribute €13.3bn to the total and BOI will add €5.2bn. EBS is required to build up €1.5bn, while ILP is to contribute €4bn.

Estimating how this will affect each bank’s loans-to-deposit ratio, the report says AIB’s will move from the 3.7 per cent held in December to 21.9 per cent, with BOI’s increasing from 9 per cent to 16.1 per cent.

EBS, on the other hand, will rise from 8 per cent to 22.6 per cent and ILP’s will be lifted from 10.6 per cent to 32.4 per cent.