IBRC annual report for 2011 - Irish Bank Resolution Corporation ...

Notes to the financial statements continued56. Asset management activitiesIn the past the Group provided custody, investment management and advisory services to third parties which involved theGroup making allocation, purchase and sale decisions in relation to a wide range of assets. Those assets that are held in afiduciary capacity are not included in these financial statements. At the end of the reporting period the Group still holds thefollowing assets under management:2011 2010€m €mEquities and investment properties 129 179Managed cash and other assets 21 28150 20757. Events after the reporting periodWealth Management businessOn 30 January 2012 the Bank announced that the Board had approved a strategy and direction put forward by management towind down its Wealth Management business in an orderly fashion. This process is currently underway and may include a cosourcingarrangement. Any final arrangement reached between the parties will be subject to the approval of the Boards of theBank and IBRC Assurance Company Limited and the consent of the Central Bank of Ireland with final ratification by the Ministerfor Finance. The Wealth Management business will continue to operate as normal during this period.IBRC Mortgage Bank ('IBRCMB')Subsequent to 31 December 2011 IBRCMB, a wholly owned subsidiary of the Bank, redeemed the remaining €1.8bn of itscommercial mortgage asset covered securities in issue, all of which were held by the Bank. These redemptions were completedfollowing consultation with the Central Bank of Ireland and in accordance with the requirements of the independent Cover-Assets Monitor. In addition, the beneficial interests in the portfolio of commercial mortgage loans acquired by IBRCMB weretransferred back to the Bank, significantly reducing the level of assets in IBRCMB. All derivative hedging contracts entered intobetween IBRCMB and the Bank have been terminated.Promissory notesFollowing an outline request, made on behalf of the Minister for Finance, the Bank is in discussions with the Department ofFinance and the NTMA regarding a settlement proposal to utilise the funds due from the next instalment under the promissorynotes on 2 April 2012 to acquire an Irish Government bond with an equivalent value. In the context of the ongoing financialsupport provided by the State to the Group, the Directors’ statutory public interest obligations and on the basis that thesettlement proposal takes account of commercial market based considerations including valuation, liquidity and fundingfactors, the Board has agreed in principle to the outline request from the Minister.The settlement proposal relates to the €3.06bn instalment due on 2 April 2012 only and does not impact on the remainingannual instalments under the promissory notes. Detailed discussions on the technical aspects of the proposal continue.58. Approval of financial statementsThe Group financial statements were authorised for issue by the Board of Directors on 28 March 2012.168