Boucher tries to clarify bank’s future moves

By Geoff Percival - Thursday, November 05, 2009

BANK of Ireland chief Richie Boucher did his best yesterday to try and clear up many uncertainties surrounding the bank.

Will there actually be a rights issue? How long will restructuring talks with the EU last? Will BoI be able to raise capital in the near-medium term? Will it be able to make payments to reduce the Government’s 25% stake by the end of the year?

Mr Boucher basically confirmed that everything remains up in the air — simply because of there being too many external uncertainties.

He told reporters that there is ample sign of markets giving capital to businesses, which they view as being sustainable; adding that Bank of Ireland is "way away from needing life support".

"We have demonstrated to the markets that our business model is sustainable," he said.

While Mr Boucher gave a "not ruling anything in or out" response to questions about the bank’s mooted rights issue. He said that a "higher degree of certainty" was needed on NAMA and more engagement was required with the EU, over the bank’s restructuring plans to tally with state aid rules.

While concerns over NAMA’s continued delay have seemingly put Bank of Ireland’s rights issue plans back to next year, Mr Boucher claimed that the company was still working to the notion that loans would begin being transferred to NAMA before the end of the year and that raising additional funding won’t be a problem for the bank.

"It’s reasonable to expect that if we can remove the uncertainties we will have access to capital markets," he said.

With regard to BoI maybe having missed the boat in terms of concerns that institutional investors may go stale on the rights issue idea, if it takes too long to become a reality, Mr Boucher said yesterday: "If we have, it must have been a fast boat."

Bank of Ireland has already raised €2.5bn on its own, through two separate bond issues in September. That said, however, it still remains unlikely that it will be in a position to make any repayments to the Government before the end of December.

Bank of Ireland issued its restructuring plan to the EU in September — which detailed the shrinking of its balance sheet by €37bn.



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