Thursday 23 March 2017

Bank of Ireland results move may aid fund raising

Louisa Fahy

Fiscal year change: Bank of Ireland. Photo: Bloomberg News
Fiscal year change: Bank of Ireland. Photo: Bloomberg News

Bank of Ireland’s decision to change its fiscal year-end may provide the lender with freedom to raise capital in the first half of the year, NCB Stockbrokers said.

Bank of Ireland moved its year-end date to December 31 from March 31. It will publish results for a nine-month period in “late” March instead of publishing 12-month figures in May.

While a March year-end would put the bank into a so-called closed period before results are announced in May, the new date frees it to raise capital after next month’s full-year results.

The Sunday Times reported on February 14 that the lender plans a rights issue to raise at least €1bn within six to eight weeks.

The change “allows it to side-step any closed-period in the crucial capital-raising window between April and the end of June,” said Ciaran Callaghan, an analyst at NCB in Dublin, who has a “buy” rating on the stock. The main benefit is “greater flexibility,” he said.

Eamon Hughes, an analyst at Goodbody Stockbrokers, said the move has a “certain logic to it.” He rates the stock “reduce.”

“It would appear that the bank has deemed an earlier period end as offering the maximum amount of flexibility to deal with any fundraising,” he said in a note. The existing year-end may have “constrained” the lender.

Bank of Ireland was unchanged at €1.30 as of 10:28am in Dublin.

Bloomberg

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