No Bank of Ireland rights issue in '09

 

Bank of Ireland is not expected to carry out a rights issue before the first quarter of 2010 at the earliest, the Sunday Tribune reported citing senior sources at the bank.

A spokeswoman for the bank declined to comment.

Bank of Ireland has already received 3.5 billion euros ($5.25 billion) of capital from the state, the same amount as rival Allied Irish Banks (), giving the finance minister an indirect 25 percent stake in each lender via preference shares.

The two banks are expected to transfer a combined 40 billion euros of risky property loans to Ireland's new National Asset Management Agency (NAMA), a "bad bank" to be launched next month, which will lead to a fresh need for new capital.

The government has said it wanted the banks to look for private sources of capital in the first instance but stands ready to inject more money if needed.

The Sunday Tribune said hopes had faded that Bank of Ireland would announce a rights issue together with its interim results on November 4 or at least before the end of this year, partly because of some delays to the passage of legislation to establish NAMA.

NAMA's draft business plan, released earlier this month, showed the legislation was expected to be passed sometime early in November.

($1=.6664 euros)