Bank of Ireland CEO Richie Boucher has hinted that the Government will soon sell its preference shares in the pillar bank, returning a profit to the taxpayer.
Speaking at the Cork Chamber Business Breakfast Mr Boucher said the Government was sitting on paper profits from its €1.8bn in preference shares.
Mr Boucher claimed that Bank of Ireland had essentially funded its own bailout and that the Government would turn a profit on bailing out the bank.
When asked about the Government’s preference shares, which can be sold on the open market following a ruling by the European Banking Authority on Nov 1, Mr Boucher said that they were keen to convert the taxpayers’ paper profits into cash.
“It’s never good playing poker and showing your cards. We are very determined to repay that investment that was made,” the CEO said.
“The Government is in the money in paper terms, we would like to convert that into cash terms. We are working on it, in the process of deciding the most optimum way to do that,” he said.
Mr Boucher said that despite the public’s opinion that Bank of Ireland had been bailed out by the taxpayer, the Government has owed money to the bank throughout the crisis.
He described the Government’s investment in Bank of Ireland as a ‘free carry,’ which is a type of investment where the cost of the investment is covered.
“Taxpayer investment in Bank of Ireland is a profitable investment. At the same time we have funded that investment. In fact the Government are a net creditor to Bank of Ireland — we own €6bn in Irish government bonds. So we funded the investment, so it’s a free carry for the Government and they are making money out of it. Which is absolutely great, so they should,” he said.
Mr Boucher paid tribute to the taxpayer who he said gave the bank a ‘huge dig out’. He said that repaying that loan has been at the core of his management of the bank since he took over in 2009.
“We got massive help from the taxpayer. When I came into the job I felt that this was one of the most important things we had to achieve and my colleagues are tired of me repeating the three Rs. Before every board meeting it is the three Rs reduce the risk, reward the risk, repay the risk,” he said.
Mr Boucher also said that the bank was now a profitable business as it had reduced its costs and was managing to raise money cheaply on the international markets protecting, its margins.
“We are moving toward profitability, in fact I think we can say that we are in profitability, but how do we keep that momentum?” he added.
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