BoI ordered not to pay interest to state

THE European Commission has instructed Bank of Ireland not to pay the state the interest it is due on its 25% preference stake in the troubled bank.

In December, the Commission imposed the same restriction on AIB which has also benefited from a €3.5bn capital injection from the state to support its Tier 1 and Tier two capital rations.

Those interest payments amount to €280m per annum each case, and if ruled out would represent a huge shortfall of €560m to the state’s depleted coffers.