Bank of Ireland
The State’s initial investment in Bank of Ireland dates back to early 2009 when the Minister for Finance directed the National Pension Reserve Fund (“NPRF”) to make an investment of €3.5bn in preference shares issued by the bank. In 2010 the State converted €1.7bn of this investment into ordinary shares and in 2011 invested another €0.2bn in equity (via the NPRF), net of a €1.05bn disposal of shares to a consortium of North American institutional investors. Finally the Minister also directly invested €1.0bn in Bank of Ireland Contingent Capital Notes (“CoCos”) in July 2011. The total investment in Bank of Ireland was €4.7bn. Since the State first invested in Bank of Ireland, the SFAD’s priority has been to protect this investment for the benefit of the taxpayer.
To date the State has exited both its CoCo and preference share investments at a profit and has now generated a net positive cash return from the State’s overall support for and investment in the bank. In addition, the State’s 14% equity stake in Bank of Ireland had a market value of c. €1.1bn at mid-year 2017.
By virtue of its different ownership position the Minister for Finance’s role and level of oversight with BOI is more limited than at AIB. Consistent with Government Policy, SFAD’s role is to advise the Minister on the timing and nature of ultimately exiting the State’s remaining 14% equity stake in the bank. The State will exit this investment in the bank in a measured fashion over time and in a manner than maximises the return to the taxpayer.