Bank of Ireland has today announced a share consolidation and corporate restructuring in moves it said would help it comply with new European banking regulations.
The bank said it has applied to establish a new Irish-incorporated group holding company, Bank of Ireland Group plc, that will become the 100% owner of the ordinary stock of the bank.
At the same time it will consolidate its share structure, with ordinary stockholder receiving one share in the new entity for every 30 units of stock held.
Stockholders' ownership of the group will not change as a result of the move, it said.
Bank of Ireland is 14% owned by the Irish State.
The move will position the share price "in a range that is more appropriate to the size of the Group" and may assist in reducing share price volatility, the bank said in a statement.
The moves were agreed with regulators at the European Union's Single Resolution Board and the Bank of England, and will allow the bank to comply with new rules on bank bail-ins, it said.
In a note today, Davy analyst Diarmaid Sheridan said that as expected, the establishment of Bank of Ireland Group plc will impact the bank's non-CET 1 capital ratios.
However, he added that no details have been provided at this point on any capital management actions that may counteract this.
"From an equity perspective, the share consolidation will be welcomed as it normalises the share count," he added.
Earlier this month, the bank's chief executive Richie Boucher said he would step down from the position before the end of 2017.
He will also resign as a director of the company later this year.
Bank of Ireland last month reported an underlying profit of €1.071 billion for the year to the end of December, down 11% from the €1.2 billion profit the previous year.
The lender also said then that it expects to pay its first dividend in a decade in the first half of 2018, a year later than initially hoped as it awaits further clarity on the Brexit vote in the UK.
