
Article 1 
The following aid, which Ireland has implemented in favour of Anglo Irish Bank and Irish Nationwide Building Society or which it plans to implement in favour of the merged entity of those two banks, is compatible with the internal market, in light of the commitments by Ireland set out in Annex I:

((a)) […] recapitalisations of Anglo Irish Bank in the amount of EUR 29,44 billion;
((b)) Implemented recapitalisations of Irish Nationwide Building Society in the amount of EUR 5,4 billion;
((c)) Implemented State guarantees for Anglo Irish Bank, including the Guarantee Scheme for Credit Institutions (CIFS), the Eligible Liabilities Guarantee Scheme (ELG), the Emergency Liquidity Assistance (ELA) and guarantees on short-term liabilities and off-balance sheet liabilities;
((d)) Implemented State guarantees for Irish Nationwide Building Society, including CIFS, ELG, ELA and guarantees on short-term liabilities;
((e)) Implemented asset relief measure for Anglo Irish Bank, namely transfers of eligible loans to the National Assets Management Agency (NAMA) of EUR 35 billion;
((f)) Implemented asset relief measure for Irish Nationwide Building Society, namely transfers of eligible loans to NAMA of EUR 8,9 billion;
((g)) […] recapitalisation of the merged entity of EUR 3,3 billion in a stress case;
((h)) Planned guarantees for the merged entity on its wholesale funding, deposits and off-balance sheet liabilities.
Article 2 
Ireland shall inform the Commission, within two months of notification of this Decision, of the measures taken to comply with it. Furthermore, Ireland shall, from the date of notification of this Decision, submit detailed six-monthly reports on the measures taken to comply with it.
Article 3 
This Decision is addressed to Ireland.
Done at Brussels, 29 June 2011.
For the Commission
Joaquín ALMUNIA
Vice-President
ANNEX I
COMMITMENTS UNDERTAKEN BY IRELAND  (1) 
Ban to develop new activities and to enter into new markets. The merged entity will not carry out activities other than those that are consistent with managing the work-out of the merged entity’s legacy loan book (including loan sales where appropriate to maximise recovery values and minimise capital losses). The merged entity will not develop any new activities and will not enter new markets. The merged entity will conserve and use its banking licence only as long as necessary for the work-out of the loan portfolio and will not use it to develop new activities. The merged entity will be liquidated once the merged entity’s assets are fully worked out.
 (2) 
As regards the merged entity’s mortgage assets, the obligations that apply to the commercial assets will apply mutatis mutandis. The merged entity, in particular, will be allowed to restructure its mortgage assets via the following variations to the terms of existing mortgages: (i) a change of deal (e.g. by offering a new fixed rate); (ii) transferring existing mortgages to new properties; and (iii) transferring equity (e.g. adding a borrower to the mortgage or removing one).
 (3) Ban on acquisitions. Other than with the prior consent of the European Commission, the merged entity will not acquire or take participations in any other firm. That ban on acquisitions does not apply to capital participations acquired by the merged entity in the framework of the restructuring of an existing exposure to a regulatory group in difficulty (for instance through a debt-for-equity swap), as long as any such restructuring complies with the principles laid down in commitment (3) above.
 (4) Ban on coupons and exercising calls on subordinated debt and hybrid capital instruments. The merged entity will not pay coupons or exercise calls on subordinated debt instruments and hybrid capital instruments, unless it is legally obliged to do so.
 (5) 
In addition, the following lending commitment will apply to the mortgage loan book: The merged entity shall limit further advances to contractually committed amounts and amounts arising as part of the restructuring of existing mortgage facilities. The aggregate total of further residential mortgage advances is capped at a maximum of […] for the period starting 1 January 2011 and ending 31 December 2012, and […] per annum thereafter.

Specific lending commitments on the commercial book. The following specific lending commitments will also apply to the commercial loan book.


((a)) Contractually committed but not yet paid-out amounts: The merged entity may advance funds under contractually committed but not yet paid-out loan facilities. However, such payments will not exceed a cumulative amount of EUR 1,4 billion over the entire plan period with regard to the merged entity’s legacy loan book, consisting of EUR 1,1 billion of contractually committed, but undrawn facilities and EUR 0,3 billion of contractually committed off-balance-sheet guarantees (as of 30 June 2010 interim accounts). Revolving facilities will be counted on the basis of the overall limit amount rather than on individual draw downs.
((b)) Additional financing to existing regulatory groups: The merged entity may not provide additional financing which is not contractually committed at the time of the approval of the restructuring plan (in line with commitment (2) above). As an exception to that prohibition, the merged entity may provided additional amounts to existing regulatory groups if it complies with the commitment in point (3) and

— It is strictly necessary to preserve the value of the loan collateral (e.g. to cover collateral maintenance, insurance, tax, security, insolvency or legal costs); or
— It is otherwise related to minimising capital losses and/or enhancing the expected recovery value of a loan or other asset on an NPV basis (e.g. meet essential investment working capital or liquidity needs of the underlying business/regulatory group).
— The additional financing is subject to the following limitation:
— If the nominal exposure to the regulatory group concerned is below […], the additional financing will not exceed […] of the nominal exposure;
— If the nominal exposure to the regulatory group concerned is between […] and […], the additional financing will not exceed […];
— If the nominal exposure to the regulatory group concerned exceeds EUR […] million, the additional financing will not exceed […] % of the nominal exposure.
((c)) New regulatory groups
New lending to new regulatory groups: The merged entity may lend to a new regulatory group only where the following conditions are cumulatively met:

 Proceeds are used to reduce the exposure of an existing regulatory group; and
 The transaction overall does not increase the total net exposure to the merged entity; and
 The new lending minimises the expected capital losses and/or enhances expected recovery values (as measured by NPV) compared to other restructuring or foreclosure strategies; and
 There is no capitalisation of interest (interest roll-up).
 (6) Specific lending commitments on the mortgage book. The following specific lending commitment will also apply to the restructuring of existing mortgage loans. When the balance of the loan exceeds the value of the property, the merged entity may facilitate the loan’s redemption through selling off the property by the way of providing additional finance to a vendor enabling the repayment of the outstanding balance; and it complies with the commitment in point (3).
 (7) On an exceptional basis and in the national interest, the Irish National Authorities may determine that exceptions to the above lending restrictions in points (7) and (8) are required to enhance expected recovery values on a Net Present Value basis. Such determinations will be subject to prior approval by the European Commission.
 (8) 
Deposits which at the time of transfer of the deposits are held by or on behalf of any subsidiary of the Transferor (but not including Isle of Man Co.):


((a)) Secured accounts (in favour of the Transferor or any other person) and deposits related or connected to a regulatory group from the Transferor or tracker bond accounts at the Transfer Time;
((b)) Deposits denominated in currencies other than euro, United States Dollars or Sterling at the time of transfer of deposits. They will not be replaced as they mature;
((c)) Deposits held or booked at branches at Jersey, at Dusseldorf, Germany or at Vienna, Austria. They will not be replaced as they mature;
((d)) Any account which has a negative balance;
((e)) Internal control accounts;
((f)) Accounts where the account or the customer to whom the account relates has been the subject of notification of an investigation by any police, fraud or investigative authority;
((g)) All INBS accounts identified in the accounting records of the Transferor by branch […].
 (9) Caps on deposits and excluded liabilities. The merged entity will not collect deposits from new customers. The overall amount of deposits from existing customers at the date of the merger will at no point in time exceed EUR 1 billion, and will not consist of deposits other than those defined in point (10) above. The merged entity will wind-down deposits at broadly the same rate as their related or connected assets are wound down (or, if there are no related or connected assets, at broadly the same rate as the overall net loan book is wound down) excluding currency movements and contractual commitments to retain deposits. In addition, the deposit book of the merged entity will not exceed the forecasts of the restructuring plan by more than EUR 200 million at any moment.
 (10) 
The Monitoring Trustee will be nominated for a period of three years. The appointment rules of the Monitoring Trustee and its duties are listed in Annex II. The Monitoring Trustee will in particular need to prove that he has an experience in the area of loan restructuring and loan management to monitor commitments (3) and (6).
 (11) Enforcement and Reporting. The Irish authorities will ensure that the merged entity complies with the above listed commitments. The Irish authorities will submit regular reports on the measures taken to comply with the commitments. The first report will be submitted to the Commission not later than six months after approval from the date of notification of the Decision and thereafter at six-monthly intervals.

ANNEX II
Anglo Irish Bank and INBS are commonly referred to ‘the merged entity’.

I.  1. The Irish authorities commit that the merged entity will appoint a Monitoring Trustee for a period of three years.
 2. The Monitoring Trustee shall be one or several natural or legal person(s) independent of the merged entity who will be approved by the Commission and appointed by the merged entity, and will have the duty to monitor whether the merged entity complies with its obligations towards the Commission and implements the restructuring and work-out plan.
 3. The Monitoring Trustee must be independent of the merged entity and must possess the necessary qualifications to carry out its mandate, for example as an investment bank, consultant or auditor, and shall neither have nor become exposed to a conflict of interest. In particular the Monitoring Trustee must have an experience in the area of loan restructuring and loan management to monitor commitments (2) and (5). The Monitoring Trustee shall be remunerated by the merged entity, which does not impede the independent and effective fulfilment of its mandate.

II. 
No later than four weeks after the date of delivery of the Decision approving the restructuring and work-out plan of the merged entity, the Irish authorities shall submit for the Commission’s approval the names of two or more persons as Monitoring Trustees and shall indicate which of them is their first choice. The proposal must contain sufficient information for the Commission to verify that the proposed Trustee fulfils the requirements set out in paragraph 3 and shall include:


 the full terms of the proposed mandate together with all the provisions necessary to enable the Monitoring Trustee to carry out its duties in accordance with these commitments;
 the outline of a work plan describing how the Monitoring Trustee intends to carry out its assigned tasks.

The Commission shall have the discretion to approve or reject the proposed Monitoring Trustees and to approve the proposed mandate subject to any modifications it deems necessary for the Monitoring Trustee to fulfil its obligations. The Monitoring Trustee shall be appointed within one week of the Commission’s approval, in accordance with the mandate approved by the Commission.
 4. If all the proposed Monitoring Trustees are rejected, the Irish authorities shall, within one week of being informed of the rejection, submit the names of at least two other persons or institutions, in accordance with the conditions and according to the procedure in paragraphs 1 and 5.
 5. If all further proposed Monitoring Trustees are also rejected by the Commission, the Commission shall nominate a Monitoring Trustee(s), whom the merged entity shall appoint in accordance with a trustee mandate approved by the Commission.

III.  6. It shall be the duty of the Monitoring Trustee to ensure compliance with the conditions and obligations attached to the Decision and guarantee implementation of the restructuring and work-out plan.
 7. 

((i)) propose to the Commission within four weeks of appointment a detailed work plan describing how it plans to monitor compliance with the commitments towards the Commission and implementation of the restructuring and work-out plan;
((ii)) monitor compliance with all commitments taken by the Irish authorities on behalf of the merged entity and implementation of the restructuring and work-out plan;
((iii)) propose measures, which the Monitoring Trustee considers necessary to ensure compliance by the Irish authorities with all commitments towards the Commission;
((iv)) submit to the Commission, the merged entity and the Irish authorities within 30 days after the end of each quarter the draft of a written report in English. The report shall cover the Monitoring Trustee’s fulfilment of its obligations under the Mandate, compliance with all commitments and the implementation of the restructuring and work-out plan. All recipients of the draft report shall be able to submit their observations within five working days. Within five working days of receipt of the comments, the Monitoring Trustee shall prepare a final report and submit it to the Commission, taking into account, if possible and at his sole discretion, the comments submitted. The Trustee will also send a copy of the final report to the Irish authorities and to the merged entity. Should the draft report or the final report contain any information that must not be disclosed to the merged entity or the Irish authorities, the merged entity or the Irish authorities shall only be provided with a non-confidential version of the draft report or the final report. The Monitoring Trustee shall submit no version of the report to the merged entity and/or the Irish authorities before submitting it to the Commission.

The Commission can give the Monitoring Trustee instructions or directions in order to ensure that the commitments towards the Commission are met and the restructuring and work out plan implemented.

The Irish authorities and the merged entity shall provide for all such cooperation, support and information which the Monitoring Trustee may reasonably require in order to perform its tasks. The Monitoring Trustee shall have unlimited access to the books, records, documents, managers and other staff members, to files, locations and technical information of the merged entity which are necessary in order to perform its tasks in accordance with the commitments.
