BoI unable to reveal yet how it will meet €4.2bn June target
Published 14/04/2011 | 05:00
BANK of Ireland will not be in a position to reveal details of plans to raise €4.2bn in capital when it presents 2010's full-year results this morning.
The news comes a fortnight after the Central Bank set BOI a new capital target on foot of the latest 'stress tests'. The bank has been given until June to raise the cash.
Many had hoped BOI would reveal its capital-raising strategy today but sources last night confirmed the plans were still being developed.
The bank's efforts are focused on convincing investors who own some €2.7bn of junior bonds to trade these for equity, and issuing some new shares.
The so-called 'debt for equity swap' has generated significant interest and could raise more than €2bn in capital. But sources stressed that it was impossible to know what the uptake would be at this stage.
The bank is also likely to attempt a 'private placement' of shares with institutions and to offer new shares to existing investors.
BOI's results come two days after AIB revealed that Nama transfers and troubled mortgages contributed to losses of €10.4bn last year.
BOI's losses are expected to be significantly lower. The bank is also not expected to follow AIB's lead and use its results to announce significant job cuts.
Shares in BOI closed up more than 10pc in Dublin last night, valuing the bank at €1.46bn.
The Government already holds 36pc of BOI and will have to invest more money if the bank cannot raise the €4.2bn from private sources. As well as raising another €4.2bn in equity, BOI must also take a €1bn 'contingent convertible' loan from the Government to deal with potential future losses.