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Jan, 2011

The private equity group bidding for EBS will try to buy Permanent TSB and other banking businesses if it manages to secure the building society, The Sunday Business Post reports.

The consortium – Dublin-based Cardinal Capital, Caryle Group and WL Ross – would move within weeks to buy other assets in a strategy to create the much-vaunted “third force” in banking. The group’s other targets include the deposit books of Anglo Irish Bank and Irish Nationwide, as well as the operations of the foreign banks who are pulling out of Ireland.

Final bids for EBS will be submitted tomorrow (Monday) by the consortium and by Irish Life & Permanent. The private equity offer is believed to involve an initial investment of between €500-€600m in EBS, which needs €483m to meet new capital requirements.

Just what this will mean for mortgage holders is unclear but regardless of ownership, it appears those on variable rates are likely to feel greater pain. The Sunday Tribune says Permanent TSB is planning the first round of a “big rise” in home loans rates for its 80,000 customers on variable rate mortgages.

Other institutions are likely to follow, of course.

“The Sunday Tribune understands that the lender will announce a half percentage increase by the end of the month, increasing its variable interest rate to 4% … But industry experts warn all banks will increase their variable home loan rates to at least 5% this year even before taking into account any increases in rates by the European Central Bank later this year.”

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