Bank of Ireland Statement

Bank of Ireland welcomes today’s announcement regarding financial support to the banking industry.

As set out in the announcement, the Government will subscribe for Euro 2 billion of 8 per cent core tier 1 preference shares in Bank of Ireland. These shares will have voting rights in respect of change of control and any changes in the capital structure. They will also confer 25% of the voting rights in respect of appointments of directors and 25% of the directors on the board, currently including any directors to be appointed in connection with the Government’s Guarantee Scheme. Bank of Ireland may redeem the preference shares within 5 years at the issue price or after 5 years at 125% of the issue price. The preference shares are non-convertible and will be treated as core tier 1 capital by the Financial Regulator and are replaceable only with other core/equity tier 1 capital.

In addition the Government will provide underwriting with respect to up to Euro 1 billion of additional core tier 1 issuance. The form and scale of such additional issuance will be determined following discussions with investors. In evaluating such additional issuance, the Bank will place significant importance on the rights of existing shareholders. The proposed recapitalisation is subject to stockholder approval. Further announcements will be made as and when the final structure of any issuance is determined.

At its Interim Results announcement on 13th November, Bank of Ireland announced that it had increased its core Tier 1 ratio from 5.7% in March 2008 to 6.3% in September 2008. Against the continuing uncertain and volatile conditions in global financial markets, the Group recognized that market expectations for capital ratios had increased and committed to further strengthening its capital through a range of options. It is against this background that Bank of Ireland welcomes the initiative by the Government to support the capital strengthening of the Irish banking system.

Its leading position in the Irish market is central to the Bank of Ireland Group. The Group remains committed to serving the needs of its personal, small and medium business and corporate customers at this difficult time. In the Irish market Bank of Ireland increased lending to its customers by 7% in the six months to end September 2008 compared to the same period in 2007. The Bank has reaffirmed its objective of growing its share of the SME market in Ireland and recently launched a 250 million Euro Business Support Fund to assist with the capital requirements of trading businesses that are looking to expand or are experiencing working capital challenges in the current economic climate. Bank of Ireland is the leading mortgage bank in Ireland and is committed to maintaining its position with the active marketing of competitively priced products.

With the benefit of new capital, Bank of Ireland is committed to maintaining a strong lending position in both of these markets that are critical to the Irish economy and is fully supportive of the Government’s Credit Package announced today. The commitment regarding the fair treatment of customers and particularly those facing difficulties, is at the core of Bank of Ireland’s customer service approach. We are determined to protect and grow our share of the consumer and business banking markets and we have seen the renewable energy market as an area of significant potential.

The further strengthening of the capital base of Bank of Ireland, with Government support, underpins the ambition of the Group to grow its business in Ireland as it plays an important role in supporting the long-term health and strength of the Irish economy.


Contact details:

Dan Loughrey
Head of Group Corporate Communications
Tel: +353 1 604 3833

Geraldine Deighan
Head of Group Investor Relations
Tel: +353 1 604 3501