Anglo Irish Bank (AIB) is to be split into a Funding Bank and an Asset Recovery Bank, the Ministry of Finance (MoF) in Ireland has announced.

The split is expected to take effect on 1 January 2011.

The MoF stated that the guaranteed position of depositors will be unchanged by the new arrangements and no action is required of them as a result of today’s announcement. It is planned that Anglo Irish Bank’s depositors – including those based in the UK – will become customers of the Funding Bank which will be fully capitalized and continue as a regulated bank.

Anglo Irish Bank operates in the UK through an EEA (European Economic Area) branch. It operates a commercial lending business and offers savings accounts through a telephone and post-based service.