Bank of Ireland tells Dáil Committee it will not require further state aid

REPRESENTATIVES of Bank of Ireland have told a Dáil Committee the bank will not require further state aid, despite having to take a significant discount on its potential NAMA transfers and not being able to raise funds to pay off existing Government investment before the end of this year.

The Joint Oireachtas Committee on Finance and Public Service heard from a combined team of the bank’s chief executive Richie Boucher, its chairman Pat Molloy and head of retail banking Des Crowley, who said that the anticipated liquidity effect from NAMA should improve the funding position of the Irish banks, and market confidence that Bank of Ireland can come off the Government guarantee over time existed.

“Despite the difficult liquidity conditions of earlier this year, Bank of Ireland hasn’t restricted the availability of funding to its Irish businesses and has provided very competitively priced products, particularly for owner-occupier mortgages and SME customers,” said Mr Molloy.

He replied to claims that he was simply putting a “positive spin” on things by saying it “was not contradictory to say that the bank’s lending capability was strengthening”.

Mr Boucher, meanwhile, reiterated that the bank’s restructuring plan, lodged with the EU, should see the shrinking of its balance sheet by €37bn.

Mr Molloy added that the restructuring plan is likely to take “some months” to conclude, but added that it should eliminate the bank’s reliance on the Government Deposit Guarantee and allow it to repay the Government’s €3.5bn preference shares.

This, he said, would leave the state “with a significant shareholding in a profitable, fundamentally sound bank supporting the Irish economy and competing actively in the Irish market”.

The bank’s management also said that the company lent more than €1.5bn in new mortgages during the first nine months of this year — with €475m going to first-time buyers — and added that it remains “open for business” for corporate customers.

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