Bank of Ireland says state to have significant stake
The Government injected ?3.5bn into Bank of Ireland lender this year. Photo: Bloomberg News
Wednesday November 25 2009
Bank of Ireland Chairman Pat Molloy said the Government will be left with a "significant" stake in the lender after its restructuring is completed.
The bank will eliminate its reliance on the Government’s banking guarantee over the lifetime of the restructuring plan, Molloy told a parliamentary committee in Dublin today.
Bank of Ireland and Allied Irish Banks have both submitted restructuring plans to the European Commission to approve state aid.
The Government injected €3.5bn into each lender this year to shore up their capital, and also guaranteed all of their deposits and some of their debt for two years.
Bank of Ireland’s five-year plan does not envisage the need for more state aid, Chief Executive Officer Richie Boucher told the committee.
The bank will repay the government’s €3.5bn worth of preference shares, and pay €1.7bn in preference share coupons and deposit guarantee fees, Molloy said.
This month, the bank posted a fiscal first-half loss of €979m as bad debts surged on plunging real-estate prices. The lender is selling €16bn of loans to the Government’s so-called bad bank to rid itself of toxic property.
Bank of Ireland rose as much as 8 cents, or 4.8pc, to €1.75 and traded at €1.72 as of 11:47am in Dublin.
- Dara Doyle and Louisa Fahy
© Bloomberg
