Reuters quotes BOI Governor Pat Molloy's response to a question from a shareholder at today's shareholder meeting: "On the matter of nationalisation, I can assure you, as far as the board is concerned, we are committed to remain independent."
It remains to be seen if this confidence is justified. It is quite likely that the taxpayer will have to contribute more money to keep it afloat. GMAC offers a lesson in this regard: it was bailed out with $12.5 billion from the US treasury in 2008 and May 2009, but came back for $3.8 billion more at the end of December 2009. A betting man might put money down on BOI needing more money from the Irish taxpayer.
Molloy did not issue any apology in his speech either. Here are excerpts:
We are acutely aware of the depth of public feeling about the banks at this time. We are working hard to learn the lessons from the past and to rebuild damaged relationships with all of our stakeholders. We know we have much to do to repair these relationships, but we are determined to do so.
Here's what Molloy said on NAMA:
Based on the Minister for Finance's statements made in this regard, Bank of Ireland will transfer up to €16 billion of property related loans to NAMA - this represents up to €10 billion of landbank and development loans and up to €6 billion of associated loans with almost 50% of these total loans outside Ireland.
Based on preliminary analysis that we have undertaken on a sample of loans representing approximately 20% of the proposed pool and interactions with NAMA and the Department of Finance - we believe that the discount to book value that we will receive in payment for these loans by NAMA should not be greater than €4.8 billion - representing a 30% discount on the Minister's estimate of €16bn total book value of loans to be transferred.
There are significant benefits to Bank of Ireland arising from our participation in NAMA.
Firstly, the removal of those property related loans from our balance sheet which are giving rise to the greatest level of concern in the market will bring greater certainty to our remaining loan portfolio and reduce the residual risk of future impairments against those loans transferring to NAMA.
Secondly, we will no longer have to hold capital against those particular loans.
Thirdly, this further progresses our objective of de-leveraging our balance sheet, thereby enhancing our liquidity and funding position.
Finally, it improves our prospects of raising capital in the future, should the Board deem it appropriate to do so.