Bank ‘fully committed to remaining independent’

BANK of Ireland’s management is fully committed to keeping the company independent and avoiding full Government ownership.

Addressing shareholder questions at yesterday’s vote on the bank’s participation in NAMA, group chairman Pat Molloy said there was a “much higher risk” of not maintaining corporate independence if NAMA involvement wasn’t approved.

“We can’t predict how much of the bank the Government will own in the future. Much of that will depend on our ability to raise extra capital. But it is very much our determination that this bank will remain independent,” Mr Molloy added.

He downplayed suggestions that the bank could have proposed alternatives to NAMA, by saying that “we are where we are” and pointing out that the Government will only support NAMA as a viable solution. Mr Molloy did, however, say that Bank of Ireland would co-operate with any banking downfall inquiry, but that it was a matter for Government to suggest whether or not there should be one.

When asked from the floor what plans were in place to raise further capital, and would either a rights issue or asset disposal programme be forthcoming, Mr Molloy replied that “all options will be considered”.

However, in the bank’s shareholder circular detailing yesterday’s meeting, management reiterated that its restructuring plan to bring it in line with EU state aid rules may still include such moves as the sale or winding down of some subsidiary companies and/or the disposal of some of the company’s retail banking branches. It added that talks with the European Commission over the plan are still at an early stage.

Mr Molloy told shareholders that post-NAMA, Ireland should see a return to “boring”, safer banking practices, adding that “hopefully, that is where it will stay.”

“We are totally committed to managing this bank to a much better place. Mistakes have been made, but we have in place the processes and the management team to take us to a much better position.”

Bank of Ireland fell by just over 8% (13c) to €1.50 yesterday, while AIB closed at €1.44; down 10.8% (18c).

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