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Regulators set bail-in debt requirements for Bank of Ireland, Allied Irish Banks

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Regulators set bail-in debt requirements for Bank of Ireland, Allied Irish Banks

Regulators have told Allied Irish Banks and Bank of Ireland how much debt they should hold that can be bailed in the event that they run into serious financial trouble.

EU's Single Resolution Board and the Bank of England told Bank of Ireland Group PLC that, by Jan. 1, 2021, it must meet a minimum requirement for own funds and eligible liabilities, or MREL, of 12.86% of total liabilities and own funds as at December 2016. This is equivalent to 26.39% of the group's risk-weighted assets and is in line with expectations and consistent with the bank's funding plans.

Meanwhile, the Irish central bank confirmed its MREL target for AIB Group PLC, the holding company of Allied Irish Banks Plc, which equates to 28.04% of risk-weighted assets as of the December 2016 balance sheet. This also applies from the beginning of 2021. The requirement is line with AIB's expectations and previously stated guidance of between €3 billion and €5 billion of issuance, the bank said.