Written answers

Tuesday, 23 October 2012

Department of Finance

Bank Debt Restructuring

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance in respect of Bank of Ireland in which he controls 15% of the ordinary shares and in addition holds preference shares valued at €1,473 million in December 2011; if he will provide an estimate of the year when the Bank will return to profitability. [45977/12]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, Bank of Ireland is a quoted company and is listed on the Irish Stock Exchange. Under listing rules I am unable to release any confidential information to the house which could be reasonably expected to have an impact on the Bank’s share price.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance in respect of Bank of Ireland in which he controls 15% of the ordinary shares and in addition holds preference shares valued at €1,473 million in December 2011; if he will provide an estimate of the year when the Bank will next pay dividends to its ordinary shareholders. [45978/12]

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance in respect of Bank of Ireland in which he controls 15% of the ordinary shares and in addition holds preference shares valued at €1,473 million in December 2011, the safeguards that he has in place to ensure that shareholders in the bank do not benefit from the distribution of dividends, or from other shareholding rewards until firstly, the bank has returned to profitability and secondly that any distribution takes account of the €4.7bn provided to the Bank by the State. [45980/12]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 167 and 169 together.

As the Deputy is aware, Bank of Ireland has been granted four State–Aid approvals between 2009 and 2011. Under the terms of these Agreements, Bank of Ireland has committed not to pay dividends to Ordinary Shareholders either prior to 31 December 2015 or the date by which the NPRFC Preference shares are repaid in full or are no longer owned by Ireland, for whatever reason. If and when the above restriction no longer applies, the Bank’s ability to pay ordinary dividends would depend on its level of capitalisation and profitability and would ultimately be a matter for the Board of Directors of Bank of Ireland. It should be noted that the State’s preference shares rank senior to ordinary shareholders with respect to dividends.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance in respect of Bank of Ireland in which he controls 15% of the ordinary shares and in addition holds preference shares valued at €1,473 million in December 2011; the reason the bank is seeking via an application to the High Court to reduce its share premium account by €3.92bn to €1.97bn. [45979/12]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware the transfer of reserves from the share premium account to distributable reserves is a normal transfer allowable under company law. Indeed, this exercise was completed by Allied Irish Bank earlier this year. At the EGM of 15 June 2011, a resolution was passed by 99.57% of the shareholders of the Bank of Ireland authorising this transfer. The reserve generated will enable the Bank to have sufficient distributable reserves to, amongst other things, make distributions and pay dividends to its Stockholders going forward (where permissible in law to so do), including helping to facilitate the payment of the dividend on the State’s Preference Stock units in 2013.

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