Sunday 25 February 2018

More than €400m wiped off State's BoI stake in just two weeks

Bank of Ireland, College Green Dublin
Bank of Ireland, College Green Dublin
Donal O'Donovan

Donal O'Donovan

A PLUNGING share price has wiped more than €400m off the value of taxpayers' stake in Bank of Ireland in just two weeks.

The bank's share price has fallen by around a quarter since the last day of February.

In financial terms, it means the State's 14pc stake in the bank was valued at €1.76bn on the last day of February but €1.35bn yesterday.

The paper losses are certain to raise questions about whether Michael Noonan and the Department of Finance missed an opportunity to recover value for taxpayers when the shares were at their recent high.

The Government is the largest shareholder in the bank.

On March 4, the bank's two biggest private shareholders, Wilbur Ross and Prem Watsa, slashed their combined 18pc shareholding by around a third, selling shares at just under 33 cents each – a discount of around 10pc to the then share price.

The shares were under pressure even before that deal was announced, dropping from a recent peak of just under 39 cents on February 28 to below 30 cents each yesterday.


Even after the latest declines the value of the shares is three times higher than in 2011, when Wilbur Ross and Prem Watsa were part of a group whose €1.1bn investment kept the bank from being nationalised outright. That investor group has tripled its money, even with the shares back at 30 cents, but the stock has been volatile.

In June last year, Bank of Ireland shares were changing hands at less then half of today's valuation. The shares ended 2013 at 25 cents each.

The State's remaining 14pc stake in Bank of Ireland is the final legacy of the €4.8bn bailout of the bank.

That investment has been recovered – in fact the exchequer has recouped about €6bn from the bank in repaid debt, interest and fees.

This includes more than €3bn last year as a result of the sell-off some rescue loans on to private investors in the markets.

Irish Independent

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