BANK OF IRELAND will advance the disposal of key subsidiaries following an expected endorsement of its restructuring plan from EU competition commissioner Joaquin Almunia.
The commissioner’s ruling is imminent and could come today or tomorrow, according to sources.
With a €2.9 billion rights issue last month predicated on the plan the bank submitted to Brussels last September, it is widely held that the capital-raising exercise would not have gone ahead if Mr Almunia wanted major changes to the bank’s proposal.
“We expect that we will have the decision very soon,” said a spokeswoman for the bank.
The restructuring plan foresees the sale of the bank subsidiaries New Ireland Assurance, Bank of Ireland Asset Management (BIAM) and the ICS Building Society.
The bank will also sell smaller assets such as FCE, a US foreign exchange business, and its stakes in asset manager Paul Capital and the Irish Credit Bureau.
While the institution has already initiated the process of selling BIAM and is in discussions with a number of parties, the sale of New Ireland Assurance and the ICS may not actually proceed for some time. Under the plan submitted to Brussels, the bank committed to sell the latter two assets some time in the period “up to 2013”.
Bank of Ireland received a €3.5 billion capital injection from the Government last year and is a participant in the National Asset Management Agency (Nama) “bad bank” scheme.
A bank source briefed on the institution’s engagements with Mr Almunia said its management did not expect that the commissioner would direct changes to the restructuring plan in the light of its engagement with Nama.
Shares in Bank of Ireland were virtually unchanged yesterday in advance of the commission’s expected ruling, closing 0.54 per cent weaker at 74 cent.
The shares were valued in excess of €18 at the height of the stock market boom.
The current share price, down 21.88 per cent in 12 months, values the bank at €3.87 billion.
BIAM was once one of the bank’s best-performers but lost substantial business after the defection of key staff some years ago. The unit had €25 billion assets under management at the end of last year
