Bank of Ireland seeks approval for share capital reduction
BANK of Ireland (BOI) has asked the Commercial Court to approve the reduction of its share capital by €3.92bn down to a sum of €1.97bn.
The proposed reduction in the bank's share premium account - approved by shareholders last June and by the Minister for Finance - will not affect the regulatory capital of the bank, the court was told today by Paul Sreenan SC.
Mr Justice Peter Kelly admitted the proceedings into the Commercial Court list and fixed the petition for hearing on November 15.
Directions for its advertisement prior to that date were also made.
In an affidavit, BOI Chief Executive Officer Richie Boucher said the reserve created from the reduction is to be treated as profits available for distribution and is intended to ensure the bank has sufficient distributable reserves, after accounting for potential losses, to enable it make distributions and declare dividends to stockholders.
The directors had resolved to seek the full amount of €3.92bn authorised under a resolution approved by shareholders, rather than any lesser amount, so as to ensure the bank had a sufficient buffer of distributable reserves available to absorb potential future losses and protect it from the effects of volatility in the financial markets, he said.
The amount of €1.97bn that would remain in the share premium account following the proposed reduction would still be €422m more than the €775m that was in the account prior to the capital raising measures undertaken by the bank between 2009 and 2011, he said.
BOI had total assets of about €155bn at end of December 2011, Mr Boucher added.