Shares in big Irish banks fall ahead of government announcement on bailouts

Shares in big Irish banks fall

DUBLIN — Shares in Irish banks fell sharply Monday, a day ahead of an expected government announcement that it will increase taxpayers’ stakes in two big institutions.

Published reports suggest that the government is preparing to take a majority stake in Allied Irish Banks and an increased stake in Bank of Ireland.

At midday, Allied Irish shares were down 19.7 percent to €1.363, and Bank of Ireland shares were 13.3 percent lower at €1.205

Finance Minister Brian Lenihan plans to make a statement to Parliament after the market closes Tuesday on the government’s plans, the Department of Finance said.

The Irish Times said Lenihan will give details of transferring bad loans to the National Asset Management Agency and changing capital requirements for banks.

Bloxham stockbrokers said leaked reports suggest that the government could end up owning 40 percent of Bank of Ireland and over 70 percent of AIB.

The state already has a 16 percent stake in Bank of Ireland, a 25 percent indirect stake in Allied Irish and full ownership of Anglo Irish Bank.