FACTBOX-EU turns up heat on bailed out banks: UK, Ireland

Oct 16 (Reuters) - Neelie Kroes, the European Competition
Commissioner whose term in office finishes at year-end, holds
the fate of some of Europe's largest state-aided banks in the
palm of her hand.

Here is a list of the top banks in the UK and Ireland that
still await her verdict, detailing the aid they received, the
measures they have taken to date and the possible payback
demanded to compensate for state aid.

LLOYDS BANKING GROUP (LLOY.L) (UK):

Type of help: UK government injected 14.5 billion pounds
($23.2 billion) in capital and holds a 43 percent stake. Lloyds
may insure 260 billion pounds of risky assets under the
government's asset protection scheme (APS), costing 15.6 billion
in non-voting "B" shares over a period of at least five years.

Status: APS details need to be finalised. Lloyds is expected
to raise cash to fully or partially avoid the scheme. Any APS
involvement likely to be deemed further state aid by Commission.

Possible sanctions: Commission could force Lloyds to sell
businesses such as life assurer Clerical Medical, Scottish
Widows or its majority stake in wealth manager St. James's Place
(SJP.L). It might have to sell hundreds of branches, such as its
Cheltenham & Gloucester network. It could be forced to reduce
its market position, such as in current accounts, where it has a
30 percent share, and sell stakes in companies built up by
HBOS's controversial Integrated Finance unit.

ROYAL BANK OF SCOTLAND (RBS.L) (UK):

Type of help: UK government injected 20 billion pounds and
holds a 70 percent stake. RBS plans to place 325 billion pounds
of risky assets into APS, paid for with non-voting "B" shares.

Status: APS details need to be finalised. RBS wants to
reduce any APS involvement with alternative financing. The bank
is already dramatically shrinking its balance sheet, mainly in
investment banking. It has been blocked from redeeming $1.5
billion of subordinated debt.

Possible sanctions: Commission could force RBS to sell
hundreds of branches. May cap market share in small business
banking. Future decisions on whether to redeem bonds will be
subject to regulatory approval.

NORTHERN ROCK (UK):

Type of help: Britain provided billions of pounds in
liquidity support to what was Britain's fifth biggest mortgage
bank after its near collapse in October 2007. The bank was
nationalised in February 2008.

Status: A formal probe was launched in April 2008. The bank
has agreed to cap its share of some business areas. A modified
restructuring plan was submitted in May. It will be split into
two; BankCo will hold its retail deposits and most of the good
assets and undertake new loans, AssetCo will hold and run-off
most of the loan book. Decision could come by year-end.

Possible sanctions: Split likely to be approved, some
restrictions may remain on certain business areas.

BANK OF IRELAND (BKIR.I) (IRELAND)

Type of help: Irish government injected 3.5 billion euros in
return for preference shares, giving the government the right to
appoint 25 percent of directors and 25 percent voting rights in
respect of change of control and board appointments.

The preference shares have warrants that give the government
the right to acquire a 25 percent stake in the bank after five
years. The state has also guaranteed bank liabilities until at
least Sept. 2010.

The National Asset Management Agency (NAMA), Ireland's "bad
bank", plans to take over 15.5 billion euros of risky commercial
property loans from Bank of Ireland if legislation establishing
NAMA is approved as expected early next month.

Status: Restructuring plan has been submitted.

Possible sanctions: The EU could ask Ireland to cut the
premium (what it refers to as "long-term economic value") it is
paying over the market price of assets taken over from banks. EU
Economic and Monetary Affairs Commissioner Joaquin Almunia said
this month he wanted the NAMA legislation passed by parliament
as soon as possible, suggesting the EU might approve it.

ANGLO IRISH BANK [AGIBY.PK] (IRELAND)

Type of help: The bank was nationalised in January. The
state subsequently offered up to 4.0 billion euros as a capital
injection. The bank was also a beneficiary of a government
guarantee for bank liabilities and will transfer an estimated 28
billion euros of assets into NAMA.

Status: In-depth restructuring plan to be submitted first to
Irish government and then to EU by end-November.
Possible sanctions: NAMA will leave Anglo dramatically
reduced, given its earlier focus on property lending. Weakened
by deposit and loan scandals, the government has been
considering selling off or winding down the bank, with a
preference to keeping it as a going concern to avoid a further
flight from investment both in Anglo and in Ireland's sovereign
debt.

As with Bank of Ireland, the EU could ask the government to
increase the discount on the book value of the NAMA loans.

ALLIED IRISH BANKS (ALBK.I) (IRELAND)

Type of help: Irish government injected 3.5 billion euros in
return for preference shares, giving the government right to
appoint 25 percent of directors and 25 percent voting rights in
respect of change of control and board appointments.

It is also covered by a state bank guarantee and is expected
to transfer 24 billion euros of loans to NAMA.

Status: Restructuring plan to be submitted by end-November

Possible sanctions: Apart from a higher "haircut" on the
loans given to NAMA, Allied Irish could be slimmed down through
disposals it is already planning to boost its capital position.

Allied is most likely to sell its stake in U.S. bank M&T
Bank Corp. It could also raise funds by selling its majority
share in Poland's BZ WBK, though it has signalled that was a
long-term strategic investment.

A complication would arise if Allied Irish itself became
subject of a formal bid from another player: it has confirmed
that it has received a preliminary approach for a stake which
industry sources said came from a Canadian bank.

($1=.6259 Pound)

($1=.6710 Euro)

(Compiled by Kirstin Ridley and Steve Slater in London, Ed
Taylor in Frankfurt, Boris Groendahl in Vienna, Gilbert Kreijger
in Amsterdam, Phil Blenkinsop in Brussels, Andras Gergely in
Dublin, Sven Nordenstam in Stockholm, Julien Ponthus in Paris;
editing by Simon Jessop)