Bank plans rights issue in November

BANK OF IRELAND plans a rights issue in November to buy out some of the Government’s indirect 25% stake in the lender, the Sunday Tribune reported, citing informed sources.

The move could raise the €1.5 billion necessary to limit the Government’s preference shares at 15%, the newspaper said, minimising the possibility of majority stake owner-ship after risky property loans are transferred to Ireland’s “bad bank”.

The bank received a state capital injection of €3.5 billion earlier this year. The Government is setting up the National Asset Management Agency (NAMA) to cleanse the financial sector of soured property debts.

A spokeswoman for Bank of Ireland said the bank would not comment on rumour and speculation. Bank of Ireland chief executive Richie Boucher told Reuters last month that there were too many uncertainties at the moment for it to consider a rights issue. The bank, which raised around €1bn through its debt buyback programme in June, recently reiterated that it expected bad debt losses for the three years to March 2011 of €6bn, nearly four times its market value.