BANK of Ireland surprised the market yesterday when it announced it scaled back its losses last year, but warned its future remains challenging.
It reported full-year losses of €609m (£544m), compared to €1.76bn in 2009, after negotiating a string of tough write-downs with its bondholders.
However, the group is still staring down the barrel of majority state control after the central bank said it needed €5.2bn in extra capital to bulletproof itself from future economic shocks. Chief executive Richie Boucher says the bank is looking to foreign investors to help it stay independent.
Bank of Ireland, in which the state already holds a 36 per cent stake, will update the market in coming weeks about its capital-raising plans, and some of its subordinated bonds have risen on speculation it will offer a debt for equity swap.
Boucher said: “It’s a clean story to understand. We have moved from survival to stabilisation.”
Most of the Irish banking sector has been effectively nationalised, with Allied Irish Banks unveiling a jaw-dropping €10.4bn loss.