BoI seeks capital reduction order
BANK of Ireland (BoI) has asked the Commercial Court to approve the reduction of its share capital by €3.92bn down to €1.97bn.
The proposed reduction in the bank's share premium account -- approved by shareholders last June and by the Finance Minister -- will not affect the regulatory capital of the bank, the court was told by Paul Sreenan.
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 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 to 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.