Shareholders in Bank of Ireland this morning approved a transaction to facilitate the payment, by the Government, of a €3.1 billion promissory note for the former Anglo Irish Bank with a bond instead of cash.

The resolution was easily passed with 99.9 per cent of shareholders supporting it.

The commercial transaction, which will net Bank of Ireland at least €38.7 million, was revealed earlier this year when the state, which has a 15.1 per cent share in the bank, asked it to enter into a repurchase, or REPO, transaction with Irish Banking Resolution Corp (IBRC), in respect of the relevant government bonds.

Bank of Ireland will finance the transaction through standard ECB open market operations, using the bonds which are Eurosystem eligble, and it will earn a margin of 135 basis points over its cost of accessing funds from the ECB.

Speaking at the egm, Pat Molloy, governor of the Bank of Ireland, said that the transaction should not have any adverse impact on the capital ratios of the bank, as the collateralised and guaranteed nature of the transaction results in a zero risk weighted asset in accordance with current regulatory capital rules.

Responding to queries from shareholders regarding the stability of the transaction, chief executive Richie Boucher was keen to assert that it was not a “riskless transaction”.

“We get paid a margin because there is a risk,” he said.

The Government, and its appointed directors in the bank, Tom Considine and Joe Walsh, were precluded from voting.