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Government to sell part of State's 13.9% share in Bank of Ireland

The sale is to happen through a pre-arranged trading plan that will be managed by Citigroup Global Markets.

Image: Shutterstock/Martin Good

Updated Jun 23rd 2021, 9:27 AM

FINANCE MINISTER PASCHAL Donohoe has announced the government’s intention to sell part of the State’s 13.9% shareholding in Bank of Ireland over the next six months. 

The sale is to happen through a pre-arranged trading plan that will be managed by Citigroup Global Markets. 

Citi were appointed to the role from the Department of Finance’s panel of financial advisors following a mini-tender competition. Citi has been mandated to effect a “measured and orderly sell down of sales”. 

In order to ensure that the taxpayers’ interest is protected, shares will not be sold below a certain price per share which the Department of Finance will keep under review. 

“Today’s announcement marks the start of a phased exit from the State’s remaining investment in Bank of Ireland,” Donohoe said. 

“When all cashflows are taken into account the taxpayer has already recorded a surplus on its investment in and support for the bank, even before the sales of these shares are accounted for,” he said. 

“A trading plan enables the State to sell down its shares in a low cost carefully controlled manner while avoiding the need to try to time our disposals with market conditions.” 

Outlining why he will not disclosure what amount of the State’s share in the bank will be sold, Donohoe told RTÉ’s Morning Ireland: “The reason why I am not going beyond saying some is that if I indicate exactly what percentage of the bank that we are willing to sell, or indeed at what price, that may well undermine our ability to get the kind of price we believe is fair for Bank of Ireland. 

“We currently have a 13.9% shareholding within our bank, and across the six-month period we will sell some of it. To go beyond that will undermine our ability to get the kind of price we believe is appropriate for that share.” 

Donohoe said he anticipates the State will still be a shareholder in the bank by the end of the six-month period.

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Bank of Ireland has called today’s announcement “a positive step”. 

“We welcome today’s announcement. This is a positive step for Irish taxpayers, the Irish economy and Bank of Ireland,” Francesca McDonagh, Bank of Ireland Group CEO, said. 

“State investment in Bank of Ireland over a decade ago should never have been needed, but we will always be grateful for the support we received. We repaid the taypayer by 2013, and again thank the State and Irish taxpayer for their extraordinary support,” McDonagh said. 

“Today’s announcement commences a process which will add to the returns already received, and also marks an important moment in normalising the relationship between the Irish State and Bank of Ireland.” 

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