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irish banks sold to danske The Sale of the Irish Banks has now been confirmed, with a reported profit on the sale of A$1.1B.

With the sale to Danske Bank:
1.
the ACE ratio increases by 67bps to 5.97% (up from 5.30%) - well above the 5.25% target range;
2.
the Tier 1 Capital ratio increases by 75bps to 8.07% (previously, 7.34%), also well up on the target range of 7-7.50%; and
3.
total capital rises by 85bps to 11.43% (up from 10.58%) and well up on the 10-10.5% target range.

The eps impact to diluted cash earnings is 6c (down to $2.20 from $2.26 previously).

Dividends are to be maintained (with no change in the dividend outlook).

The surplus ACE capital is now $1.8B due to:
1.
est profit on sale of $1.1B;
2.
ACE impacts of $0.1B; and
3.
reduction in RWAs of $0.6B.

The exit multiple was 2.1x the prof forma book values (to September 2004).

Of additional significance is that Danske is to assume responsibility for the Irish pension costs. This will have a further beneficial effect becuase it means that:
1.
some of the provisions previously made by the NAB in this area can be unwound (except where housed solely within the 2 Banks being sold); and
2.
analysts will have to now adjust for this in their forecasts.

With ~3,100 staff affected by the sale, this amounts to ~8% of the NAB's global workforce.

The result, in my view, is well above market and analyst expectations.