Bank of Ireland to raise pounds 95m with rights issue

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The Independent Online
BANK OF IRELAND, one of the Republic of Ireland's two leading clearing banks, yesterday announced a six-for-one rights issue to raise Ir pounds 100m (pounds 95m) at 150p a share in order to retire dollars 125m (pounds 84m) of US preference stock that it said was becoming too expensive, writes Lisa Vaughan.

At the annual general meeting in Dublin, the bank's Governor, Howard Kilroy, said the time was right for an issue that would also restore the bank's slipping equity to assets ratio.

The bank has suffered dollars 100m losses in its US subsidiary for several years and was hit by the Greencore share placement fiasco this summer. But analysts said the issue was not a distress signal.

Mr Kilroy said he expected good group profits this year and US prospects were improving. Second-quarter profits of Bank of Ireland First Holdings Inc were likely to be similar to its first-quarter loss of dollars 2.7m.

The group reported pre-tax profits of Ir pounds 124m in the year to 31 March 1993.

The bank's capital position will improve after the issue, with tier one capital rising to 7.3 per cent from 6.6 and total capital to 13.3 per cent from 12.6. The offer is open for three weeks.

The court of directors recommended that next year's dividend be maintained at 9.83p, a 6.5 per cent rise over 1992/93 after the issue is incorporated.

The shares, 87 per cent of which are held in Ireland, closed 9p lower at 241p in London yesterday. Analysts said they expected the issue to be well received because the shares were priced at a deep discount.