Bank to resist full state control

By Geoff Percival - Saturday, July 04, 2009

RICHARD BURROWS brought his four-year tenure as Bank of Ireland governor to an end yesterday, by telling shareholders at the company’s annual general meeting that full nationalisation of the bank would be resisted.

However, Mr Burrows — who was formally succeeded by the bank’s former chief executive, Pat Molloy as governor, after yesterday’s meeting — added that there was no immediate plans for a rights issue, which some commentators have opined could lower the State’s shareholding in the bank from 25% to just 7%.

Last month, Davy Stockbrokers said that Bank of Ireland shouldn’t require any further funding and is "well placed" to conduct a €1.5bn+ rights issue later this year, which would pay off part of the Government’s €3.5bn investment and lower its stake considerably.

While Bank of Ireland refused to comment at that time, Mr Burrows addressed the issue head-on yesterday.

"We believe we are perfectly adequately capitalised at the moment. But, the situation regarding capital is always under review," he said.

On the subject of full nationalisation of the bank, Mr Burrows said that such an outcome would not happen, if it could be helped.

"Government has made it clear on a number of occasions that Ireland should be served by independent financial institutions. We will do everything necessary to ensure we remain independent. I have no crystal ball, but our orientation is on doing the right things now to ensure we’re not nationalised."
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