Anger at BoI meeting over further losses

BANK OF Ireland governor Pat Molloy faced angry shareholders and had an egg thrown at him during the bank’s annual meeting, as investors face further losses in a second capital-raising in a year.

At a heated meeting in O’Reilly Hall in UCD, Mr Molloy said the bank had to raise a further €4.2 billion in cash – on top of €3.6 billion it raised last year – following Central Bank stress tests.

The bank’s capital should “significantly exceed” the higher minimum level set by the Central Bank based on the bank’s own three-year estimate of losses between 2011 and 2013, said Mr Molloy.

Bank of Ireland is seeking to raise up to €2.1 billion in a cash-or-shares deal with subordinated bondholders and up to €2.2 billion from shareholders in a rights issue underwritten by the Government.

The State’s ownership of the bank could rise from 36 per cent to more than 75 per cent, depending on the interest among bondholders and shareholders.

The bank has submitted a revised restructuring plan to the European Commission reversing its decision to sell ICS Building Society and to delay the sale of New Ireland Assurance by a year.

Mr Molloy said ICS had “a very solid and very durable deposit” which was valuable as it attempts to reach a targeted 122.5 per cent loans-to-deposits ratio (€122.5 in loans for every €100 in deposits).

Bank chief executive Richie Boucher told shareholders it would be “counterproductive” to sell this business while trying to reach this this target. He didn’t expect the sale of New Ireland over the next 18 months, due to the restructuring of Irish Life Permanent and the sale of its Irish Life business.

Mr Molloy ruled out the sale of the bank’s building – the former Irish parliament – on College Green in Dublin city centre, saying it was a “crucial” part of the business and “a very substantial contributor to the bottom line”.

He was replying to a question from a shareholder who recommended the bank sell the property to raise cash after Minister for Arts Jimmy Deenihan wrote to the bank to acquire it last month.

Mr Molloy said the branch had about 30,000 customers and 1,000 customers a day used it.

A staff member of the bank told Mr Molloy employees were embarrassed when it emerged last March that senior staff had received bonuses at a time when employees had to sympathise, apologise, empathise and explain the losses to customers in branches.

Shane Ross TD queried the €8 million paid to the bank’s auditors PricewaterhouseCoopers.

“It’s a lot of money but this is part of what we have to confront,” replied Mr Molloy.

Paul Haran, Dennis Holt, Heather Ann McSharry, Des Crowley and Denis Donovan retired as directors yesterday.

Mr Molloy, Mr Boucher, Rose Hynes, Jerome Kennedy, John O’Donovan and Patrick O’Sullivan were re-elected to the board.

All but Mr Molloy and Mr O’Sullivan were appointed before the financial crisis began in 2008.