EBS, INBS to start tie-up talks this week

News At One: Fergus Murphy, EBS Chief Executive, tells Business Editor David Murphy that merger talks with Irish Nationwide could be concluded before Christmas
RTÉ.ie Extra Video 2: Finance Minister Brian Lenihan talks to reporters about a possible link between EBS and Irish Nationwide
RTÉ.ie Extra Video: EBS chief executive Fergus Murphy speaks to Business Editor David Murphy about merger talks with Irish Nationwide

Monday, 23 November 2009

Finance Minister Brian Lenihan has said the State is likely to be a substantial shareholder in a new building society following the merger of EBS and Irish Nationwide. It is expected that the link-up of the two organisations will require a capital injection from the State.

EBS's chief executive Fergus Murphy has confirmed that merger talks with Irish Nationwide will begin this week. Speaking at a conference in Dublin today, Mr Murphy also said that the Government may have a 40-60% stake in a merged EBS and Irish Nationwide.

In an interview with RTÉ News, he said that under building society regulations, there is a clause for a transfer of engagement. Watch the interview here

'This would allow two building societies to merge. That will be used to let this take place. The balance sheet of Irish Nationwide Building Society would transfer to EBS', he explained. 'We have yet to commence formal talks but that is likely to take place very soon,' he added. He said EBS could need another €100m in capital beyond the €300m it already flagged.

The chief executive of Irish Nationwide Gerry McGinn told staff that executive chairman Danny Kitchen had written to EBS chairman Philip Williamson about the best way to proceed with formal discussions between the two organisations. Mr McGinn confirmed talks would get underway later this week.