Business Irish

Sunday 19 November 2017

BoI delays release of results as it tries to limit state control

Emmet Oliver and Joe Brennan

BANK of Ireland has postponed the release of its results until tomorrow when it is expected to outline plans for an upcoming 'rights issue' designed to limit state control to about 40pc.

It is understood the Financial Regulator is demanding the bank raise €3bn to cushion its capital reserves.

The release of the results is likely to clash with that of Anglo Irish Bank, an eventuality Bank of Ireland was trying to avoid.

However, analysts will be focusing on the bank's plans in relation to raising fresh capital. The bank will publish results for nine months to the end of December tomorrow, including bad-loan losses of up to €2.5bn, according to analysts.

Bank of Ireland had originally planned to disclose results today, but this was scrapped after its NAMA discount figures did not become available on time.

The bank, led by chief executive Richie Boucher, is hoping to boost its capital by €3bn in three ways.

It will offer a debt-for-equity swap involving subordinated bondholders, which could generate €500m.

It will also do a rights issue, underwritten by a group of investment banks, which it hopes could raise about €1.5bn. The final part of its fundraising will come when the Government converts preference shares into ordinary stock, helping the bank to book a capital gain of €1.5bn.

Crucially, the bank is still awaiting the publication of an EU restructuring plan before it can undertake its capital raising.

The bank's chief priority is to keep state control below 50pc.

However, it will need the Government to help underwrite the rights issue and the guarantee of its liabilities, agreed in September 2008, remains vital to it successfully raising money.

Consensus among brokers is that the bank will unveil a pre-tax loss of €2.1bn.

Irish Independent

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