Investors in BoI show support for rights issue

MORE INSTITUTIONAL investors at Bank of Ireland would support a “rights issue” cash call of investors than at Allied Irish Banks (AIB), according to a banking survey by stockbroking firm, Bloxham.

Some 85 per cent of 40 institutional investors, including 20 non-Irish shareholders, said they would support a rights issue at Bank of Ireland, compared with 76 per cent at AIB.

The survey, which also canvassed the views of 450 retail shareholders, found roughly the same level of support, about 65 per cent, for a rights issue among retail investors at both banks. Bloxham said shareholders’ support for a rights issue had fallen since its last survey in July, but remained high.

More than 50 per cent of shareholders within the banks are retail investors, as institutional shareholders have sold down their interest in Irish banks following the collapse of their share prices.

More than 60 per cent of investors felt that the Government taking majority stakes would negatively affect their decision to invest in the two banks.

Support for a conversion of some or all of the Government’s €3.5 billion preference shareholding into ordinary shares dropped from 54 per cent to 28 per cent among Bank of Ireland retail investors after the State took a 15.7 per cent stake last week.

Kevin McConnell, analyst at Bloxham, said that about 70 per cent of retail investors had expressed an interest in investing in coupon-bearing instruments.