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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.

LAST UPDATE | 23 Jun 2021

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.

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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    Mute Liam Edward Harris
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    Jun 23rd 2021, 8:19 AM

    “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,”

    So if it’s earning us money why are we selling it?

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    Mute David Corrigan
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    Jun 23rd 2021, 8:27 AM

    @Liam Edward Harris: They can’t allow the taxpayers to benefit from such things. That goes against everything they stand for.
    The taxpayer has to suffer and always be at a loss.

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    Mute DK
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    Jun 23rd 2021, 8:29 AM

    @Liam Edward Harris: Need money for all these covid restrictions, we’re spending billions a month.

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    Mute Liam Edward Harris
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    Jun 23rd 2021, 8:33 AM

    @DK: yeah and lumping all the country’s possessions down to the nearest Cash for Gold is a very short sighted strategy for that.

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    Mute Carpentoza
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    Jun 23rd 2021, 8:51 AM

    @Liam Edward Harris: The value of your investments can go up or down!

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    Mute Peter McGlynn
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    Jun 23rd 2021, 9:01 AM

    @Liam Edward Harris: need to pay for mica homes to be rebuilt which will cost billions – light touch Fianna Fáil / Fine Gael regulations coming back to bite again and again.

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    Mute Rory J Leonard
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    Jun 23rd 2021, 9:24 AM

    @Liam Edward Harris:

    The State bailed out the banks following crash of 2008, due to failure of Statecraft over many years. Put simply, too many people within the establishment failed to do their well paid jobs properly, & badly let down the citizens.

    BOI was always a public company, but State funds were required to keep it afloat, hence its equity involvement. It was always going to be a temp arrangement. This proposed sale is the last chunk in BOI, some having already been sold off some years ago. With AIB & PTSB, state slice is still 70% +.

    BOI paid dearly for the dig out, not just in annual Dividends,but in Fees.

    Now that new life has been injected into BOI, it’s time to exit. State has a need for proceeds, & state involvement could be hindering BOI achieving its full potential!

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    Mute Sal Paradise
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    Jun 23rd 2021, 9:53 AM

    @Rory J Leonard: “always going to be a temp arrangement”….like the aul USC.

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    Mute Dean
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    Jun 23rd 2021, 11:30 AM

    @Liam Edward Harris:
    It’s FG policy — sell everything, privatize everything.

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    Mute Paul Tao
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    Jun 23rd 2021, 11:42 AM

    @Liam Edward Harris: Just because something makes the taxpayer money, doesn’t mean it’s an overall worthwhile investment. The taxpayer has also suffered tremendously from lack of competition in the Irish banking sector, much of which can be out down to no impetus for innovation/competition. Why bother competing with eachother when most of the banks have the same ultimate owner (the govt)..
    Shareholdings in BoI, PTSB, AIB should have started quicker offloading years ago. Good Irish investments for taxpayers – for example ARI – remain and are kept.

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    Mute Patrick O Connell
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    Jun 23rd 2021, 12:22 PM

    @Peter McGlynn: the money is needed to bail out homeowners who have micra effected houses yet builders, suppliers etc get off Scott free. Look at Priory Hall for example

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    Mute Ixtrix Net
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    Jun 23rd 2021, 3:32 PM

    @Rory J Leonard:
    That’s pretty much all correct. The one aspect I have some doubt of, is the ‘time to exit’ part, as I see /seen it (and been no news regarding for a while) , is ithe KBC exit from Ireland, which should almost certainly ramp BoI shares when takeover, or soon after/

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    Mute Frédéric Slimane
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    Jun 23rd 2021, 6:08 PM

    @Liam Edward Harris: very good question does anyone have an answer?do they for some reasons have to sell?

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    Mute Ixtrix Net
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    Jun 23rd 2021, 6:43 PM

    @Frédéric Slimane:
    that *kinda* links in with my above post.
    the weird (ish) part is when tie in KBC, generally that would increase share price.
    Gov sell beforehand (imo) raises a question of ‘insider trading’ , since they *may* know something we don’t

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    Mute Colette Kearns
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    Jun 23rd 2021, 10:35 PM

    @Liam Edward Harris: And selling it with a 40% discount. We’re been fleeced again!

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    Mute Eddie Michael
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    Jun 23rd 2021, 8:02 AM

    Which hedge fund will scoop in first….

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    Mute DK
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    Jun 23rd 2021, 8:33 AM

    @Eddie Michael: BOI are a public company, you can buy shares whenever you want if you’re worried you’re missing out.

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    Mute iohanx
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    Jun 23rd 2021, 12:47 PM

    @Eddie Michael:

    Watch for a BOI share buyback ;)

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    Mute s
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    Jun 23rd 2021, 8:08 AM

    To cheapest buyer (friend of a friend)

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    Mute Eddie Michael
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    Jun 23rd 2021, 8:09 AM

    @s: love that golden circle…

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    Mute Thomas O' Donnell
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    Jun 23rd 2021, 8:48 AM

    @s: It’s a public sale?

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    Mute Opinionated
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    Jun 23rd 2021, 8:27 AM

    Why are they selling the shares if they are generating revenue for the public? Surly regular dividends would be the better option and also a little government control in the bank seeing that BOI is also trying to remove all comptition out of the Irish market with there move to buy KBC out of the market, or perhaps Black Rock has already brought some government folks out too dinner.

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    Mute Alan Wright
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    Jun 23rd 2021, 8:35 AM

    @Opinionated: “BOI is also trying to remove all comptition out of the Irish market”?. KBC announced they are leaving the market themselves, not a hostile takeover. By your logic the Irish government are removing Ulster Bank as competition as AIB (pretty much fully owned by the government) are purchasing Ulster Banks portfolio.

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    Mute Sam Harms
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    Jun 23rd 2021, 9:09 AM

    @Opinionated: any dividends they have paid over the past few years have been tiny

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    Mute Paul Jude Redmond
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    Jun 23rd 2021, 3:46 PM

    @Opinionated: we’re selling the family silver to pay for covid and future redress schemes

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    Mute camio55
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    Jun 23rd 2021, 8:44 AM

    Positive news. The state disinvestment is long overdue and has to be welcomed. Banking is going through a transformation and it is not clear what the future holds for old style banking. Regrettably we cannot exit AIB at present without sustaining a huge loss.

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    Mute iohanx
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    Jun 23rd 2021, 12:23 PM

    @camio55:

    Agree, Irish banks are being held back by government shareholding. Rating agencies don’t like this which ultimately holds back large inst investors.

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    Mute JustMeHere
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    Jun 23rd 2021, 12:52 PM

    @camio55: bahahaha the state is profiting from this investment and it should be retained. Bank of Ireland is exempt from corporation tax for another 20 years. Nasty Noonan made sure of this before he left office. Its a sick cabal.

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    Mute ShaneO'Mac
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    Jun 23rd 2021, 8:36 AM

    Keep the stake to ensure another source of revenue for the state.

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    Mute s
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    Jun 23rd 2021, 8:47 AM

    To cheapest buyer (friend of a friend)

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    Mute JohnBeeRyan
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    Jun 23rd 2021, 11:16 AM

    I wonder when was this officially announced? BOI shares took a dive so is it possible insiders knew and offloaded?

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    Mute Eddie O'Neill
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    Jun 23rd 2021, 10:30 AM

    Does that mean Bank Of Ireland might stop gouging customers for every last cent?

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    Mute JustMeHere
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    Jun 23rd 2021, 12:54 PM

    @Eddie O’Neill: nope. Move to N26 virtual bank. Free banking. Time to ditch the Irish banks.

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    Mute Declan Carr
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    Jun 23rd 2021, 11:40 AM

    Time to withdraw your money.

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    Mute Shane Cormican
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    Jun 23rd 2021, 4:12 PM

    Sure it’s price is low now?

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