Bank of Ireland to seek own funds

(SHARECAST) The Bank of Ireland today vowed to raise the €2.2bn (£1.9bn) demanded under the terms of the Irish bailout through its own efforts and without the help of the Irish state.

The Irish bank has to raise the additional capital by the end of next February or else get the cash from the Irish state, which would amount to effective nationalisation.

Irish taxpayers already own 36 percent of the bank, but this could rise to 80 percent depending on how successful or not its own fund-raising efforts prove.

In a statement today, the Bank of Ireland said it intends to raise the money through a “combination of internal capital management initiatives, support from existing shareholders and other capital markets sources”.

“The Irish government will subscribe for the incremental capital, should the bank not be in a position to raise sufficient capital within the proposed timeframe,” it added

If it raises new equity, its estimated pro forma Equity Tier 1 and Core Tier 1 ratios as at 31 December 2010 are about 10 percent and about 12.5 percent respectively, the statement said, which would meet EU requirements.

The bank was worth just €1.4bn last week, but raised €3.5bn earlier in the year, and is said to be optimistic about raising at least some of the money. This could include a sale of its UK arm, reports at the weekend suggested.