Highlights: Key points of Ireland's bank rescue

DUBLIN (Reuters) - Ireland disclosed a mammoth "final" price tag of nearly 40 billion euros ($54.33 billion) on Thursday for bailing out its distressed banks and promised a new four-year budget plan in November.

Following are the key points of Thursday's announcements:

FISCAL IMPACT

Finance Minister Brian Lenihan said the bailouts will see a "very substantial spike" in Ireland's budget deficit this year, raising the headline figure to around 32 percent of gross domestic product (GDP).

Taking away the one-off banking hit, Lenihan said Ireland was broadly on budget target for 2010 and remained fully committed to reducing its deficit to below the European Union's 3 percent of GDP by 2014.

The full costs for Anglo Irish and Irish Nationwide will be added to Ireland's general government debt, raising its debt to GDP ratio to 98.6 per cent this year. Lenihan said Dublin aimed to stabilize this ratio in the 2012/13 period.

He said the government will unveil a new four-year budget plan in November, incorporating annual measures for each year, to produce a "credible path to show how we propose to meet this commitment."

The bill for Anglo and INBS will be spread out over at least a decade meaning that no additional borrowing arises this year as a result of this capital support to the banks.

With the exchequer fully funded through to the middle of next year, Ireland's debt agency will not proceed with scheduled bond auctions in October and November, and will return to the bond markets in the normal way in early 2011.

Lenihan said that in dealing with Anglo and INBS, there would be "appropriate burden-sharing" with holders of subordinated debt instruments in both institutions.

BANKING IMPACT

Under its base scenario, the central bank said the Anglo Irish bill was expected to be 29.3 billion euros and could rise by another 5 billion euros in stressed circumstances.

That includes the 22.9 billion euros the state has already provided since Anglo Irish Bank was nationalized early in 2009. Lenihan added that support for the state-owned Irish Nationwide Building Society would rise to 5.4 billion euros from 2.7 billion.

Allied Irish Bank, the country's second-largest lender, was told to find an additional 3 billion euros, meaning that following the sale of its 70 percent stake in Bank Zachodni to Banco Santander, it needs to raise 7.9 billion euros by March 31 to meet new regulatory demands.

AIB still hopes to sell its 22.5 percent stake in U.S.-based M&T Bank Corp and units in the UK. But Lenihan said the lender acknowledged that it was unlikely to be able to conduct a privately underwritten rights issue under current stressed market conditions.

The capital requirement will instead be met through a placing and open offer to shareholders of AIB shares to the value of 5.4 billion euros, a transaction fully underwritten by the National Pension Reserve Fund Commission (NPRFC).

The NPRFC's underwriting commitment will be satisfied by the conversion of up to 1.7 billion of its existing preference shares in the bank into ordinary shares along with a new cash investment for the balance of 3.7 billion euros in ordinary shares.

If the bank's residual capital requirement is not met through asset sales by the end of March next year, the shortfall will be met by the conversion of a proportion of the remaining 1.8 billion euros of preference shares.

The bank said its executive chairman Dan O'Connor will step down in the coming weeks and group managing director Colm Doherty will follow suit before the end of 2010.

The country's largest lender, Bank of Ireland, which replenished its capital to the tune of 3 billion euros earlier this year, has already met the financial regulator's capital requirements.

EBS building society, the fifth participant in Ireland's "bad bank" scheme, will not be materially impacted by the increase in discounts on the loans it is transferring to the agency.

The building society needs to find 525 million euros by the end of the year. The state has already injected 100 million euros and promised another 250 million via promissory notes, and Dublin said the sales process to decide its future was still ongoing.

(Reporting by Padraic Halpin; editing by Andras Gergely and Hugh Lawson)