Bank of Ireland loses €3m in sale of units bought for €281m
BANK of Ireland, headed by Richie Boucher, made a loss on the sale of its Iridian asset management and Guggenheim fund management businesses in the US, which had cost a combined $380m (€281m) to acquire.
The group's preliminary results, unveiled during the week, show that the group booked a €3m net loss from the disposals of its majority interests in both last summer as it pulled off a major retrenchment from international fund management.
BoI posted an underlying pre-tax loss of €2.9bn for the nine months to December, after setting aside more than €4bn to cover bad-loan losses during the period.
In 2002, when under the leadership of Mike Soden, Bank of Ireland bought Iridian, paying $196m for a 61pc stake in the US institutional fund manager. The group was looking at the time to build upon the then huge success of its Bank of Ireland Asset Management (BIAM) in North America.
Three years later, his successor Brian Goggin stumped up $184m to take a 71pc holding in Guggenheim Alternative Asset Management.
The group took a €304m goodwill charge against both assets in the year to the end of March 2009, as the value of the businesses were hit by the collapse of global stock markets in recent years.
The sales of the two units contributed to a halving in fees at the group's overall asset management business. The total business, once a jewel in the crown of the bank, turned in a €23m pre-tax profit for the nine months to the end of December.
BIAM, which controlled Guggenheim and Iridian, had seen its assets under management more than halve in recent years from an all-time high of €57bn in 2004.
It has since been usurped as the country's largest fund manager by Irish Life Investment Managers.
BoI started a strategic review of BIAM in early 2008 to find a buyer or partner for the beleaguered unit, after shutting down offices in North America.
But the group abandoned plans to find a partner later that year, triggering plans to cut 30 jobs from its then 160-strong workforce.