THE bank has sought to reduce its share capital to create a bigger pool of cash to pay the Government dividends.
It brought a petition to the Commercial Court seeking to reduce its share capital by €3.92bn to €1.97bn.
Bank of Ireland chief executive Richie Boucher (right) said in an affidavit that the reserve will be treated as profits available for distribution and is intended to ensure the bank has sufficient reserves to be able to pay dividends.
The Government bailed out the bank in 2009 with a €3.5bn investment by way of preference shares.
The State converted almost €1.7bn of this into equity shares in a rights issue to raise further capital in 2010.