Bloomberg News

Bank of Ireland Rises After Selling 5 Billion Euros of Loans

October 17, 2011

Oct. 17 (Bloomberg) -- Bank of Ireland Plc rose as much as 5.2 percent after the nation’s largest lender by assets agreed to sell about 5 billion euros of loans at a 9 percent discount averaged to par value.

The bank, which announced the sale on Oct. 14, traded up 3.1 percent at 10 euro cents as of 9:40 a.m. in Dublin trading. While the lender said the transactions will have a “neutral” impact on its capital reserves, UBS AG analyst John-Paul Crutchley said in a note that the 9 percent discount compared to his estimate of 15 percent average “haircuts” on its non-core portfolio.

“Although the price of these disposals is an important factor for the group’s” profit and loss account, “we think that Bank of Ireland will benefit most from a smaller, more profitable balance sheet,” he said.

To contact the reporter on this story: Joe Brennan in Dublin at jbrennan29@bloomberg.net

To contact the editor responsible for this story: Dara Doyle at ddoyle1@bloomberg.net


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