The Irish government is expected to announce further bank bailout measures around the end of March. So far it has nationalised Anglo Irish Bank and acquired minority stakes in Allied Irish Banks and Bank of Ireland. This month it wants to start shifting property loans worth 80 billion euros into the National Asset Management Agency (NAMA), a “bad bank”. The discounted NAMA sales will prompt banks to raise additional capital, probably including further injections from the state, and it will also trigger consolidation in the industry. The exact shape of the sector will depend on the new capital requirements to be set by the regulator, the level of the discount on the loans transferred to NAMA and what demands are made by the European Commission in return for state aid. Following are possible scenarios: Banks succeed in raising private capital - This is the option preferred by the banks and the government. Bank of Ireland said it would consider a rights issue once it had heard from the EU on its restructuring plan and had more clarity on the NAMA transfers. It has shifted its business year, giving it an unrestricted period around April and May in which it could embark on a rights issue. Analysts say it would need to raise more than 2 billion euros.
