Headlines

Irish Life & Permanent will be effectively nationalised with the injection of up to €3.8 billion in State funds by the end of next month to meet the Central Bank’s capital bill, the company has said, the Irish Times reported. The company told shareholders in a circular published yesterday it proposed issuing up to €3.4 billion in ordinary shares to the Minister for Finance and a further €400 million in contingent capital, leaving the State with a shareholding of more than 99 per cent.

Britain is facing a tsunami of house repossessions as soon as interest rates start to rise, one of the country's leading bankers has warned. Richard Banks, the chief executive of UK Asset Resolution (UKAR), the body that runs the £80bn of mortgages bailed out by the taxpayer during the banking crisis, also said in an interview with the Guardian that the Labour government's pleas at the start of the crisis for lenders to keep families in their homes was forcing some homeowners further into debt.

The I$M Bank has raised its lending by 1.5 per cent to reflect an increase in lending rates by the Central Bank, Business Daily Africa reported. This makes I$M Bank the second industry player to increase the cost of credit in the country with other players expected to follow suit as the CBK tightens its monetary policy. The revision puts the lending rate above the industry average of 13.92 per cent according to the Central Bank of Kenya. Commercial Bank of Africa revised their rates one week ago by the same margin to 14.5 per cent.

Lloyds Banking Group’s exposure to the riskiest kind of mortgages is more than double that of any of its top five rivals in what is potentially a ticking time bomb for Britain’s largest high-street lender, the Financial Times reported. Data published last week by the Bank of England showed that loans representing more than a quarter of Lloyds’ mortgage book are worth at least 90 per cent of the property value they are secured against.

Small Danish bank Fjordbank Mors asked on Friday to be taken over by government administrators and wound up after regulators ordered it to bolster its balance sheet to cover its risks, Reuters reported. Fjordbank Mors is the latest small Danish bank to fail in the wake of the financial crisis, the most significant of which were the 2008 collapse of Roskilde Bank and the downfall in February this year of Amagerbanken.

The French government and banks have agreed on a proposal to make a Greek debt rollover more palatable to creditors, a banking source said on Sunday, confirming a report in Le Figaro newspaper, Reuters reported. Under the plan, creditors would reinvest 70 percent of the proceeds reimbursed when Greek debt falls due, with 50 percent going into new Greek bonds with a maturity of 30 years instead of five, the newspaper said on its Web site.

Kuwait Finance House, the country's biggest Islamic lender, said on Sunday it has signed a deal with Gulf Investment House to restructure the KD49.5 million ($180 million) it owes in debts, TradeArabia reported. The agreement 'includes converting the current debts from short term to medium term for a period of five years. The agreement was signed in collaboration with Boubyan Bank and Burgan Bank,' KFH said in a statement.

The receiver of failed lender St Laurence says investors will probably get a return at the lower end of its forecast range, and is working towards making a second repayment in August, BusinessDay reported. Receivers Barry Jordan and David Vance of Deloitte expect investors will get a return at the lower end of 15 per cent to 22 per cent range on secured debenture holders' principal, according to their latest report. They said they want to make a second payment in August, with a third and final distribution next year. Debenture holders were paid 9 cents in the dollar in January.

State-controlled lender WestLB AG said its owners have agreed on a detailed framework to break up the German bank, paving the way after months of haggling to meet European Union demands that it slim down and find a new owner, The Wall Street Journal reported. The plan will be submitted to the European Commission, the EU's executive arm, for approval on June 30 by the German government, after all the current owners' decision-making bodies—including the lower house of Parliament of the German state of North Rhine-Westphalia—formally approve it next week.

Blockbuster Inc.'s Canadian subsidiary on Thursday got a 14-day extension to keep using the Blockbuster name through the middle of July, as the video-rental company sorts out issues on both sides of the border, Dow Jones Daily Bankruptcy Review reported. Without the agreement, Blockbuster Canada would have been forced by new Blockbuster owner Dish Network Corp. to stop using the Blockbuster name on June 30. After about two hours privately meeting with Judge Burton R. Lifland of the U.S.