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NPRF offloads €1bn Bank of Ireland shares to North American investors

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  • NPRF offloads €1bn Bank of Ireland shares to North American investors

IRELAND - The National Pensions Reserve Fund (NPRF) has sold part of its stake in Bank of Ireland (BoI) to a group of North American investors for €1bn, the Irish Ministry for Finance has confirmed.

The sale, to a consortium led by Canada's Fairfax Financial Holdings, was first rumoured in late July and later confirmed, with a report by the Comptroller and Auditor General last month revealing that the ministry had given its blessing for the transaction to take place.

The bank revealed at the end of July that in addition to Fairfax, WL Ross, Capital Research - which forms part of the Capital Group - Kennedy Wilson and Fidelity Investments formed the conglomerate.

As a result of the deal announced yesterday, 10.5bn BoI shares were sold for €0.10 each, marginally above the share's price at time of closing on Friday. 

Since the beginning of the year, shares in the bank have dropped 73% in value, peaking at €0.40 in early February.

Minister for Finance Michael Noonan said: "The commitment by a number of significant private sector investors to invest side by side with the state's retained holding without any form of additional risk sharing by the state reaffirms the government's banking policy as announced on 31 March."

Referencing the government's declining stake in BoI, down 21 percentage points to 15%, Noonan added: "It further underlines how we are successfully breaking the link between bank risk and the sovereign."

The most recent quarterly returns for Ireland's pensions reserve fund revealed a loss of 9.1% for its directed portfolio - used by the Ministry for Finance to inject cash into the country's banking system - with total assets under management of €20.8bn at the end of June.

A spokeswoman for the NPRF said that all income from the sale would be transferred back to the Irish exchequer to "reduce the amount required from the state as part of the re-capitalisation" of the banking system, not to be returned to the discretionary portfolio, still controlled by the NPRF Commission.

In other news, a survey by Mercer found that Irish women are less likely to be members of defined benefit (DB) schemes than men.

According to the consultancy, more than a fifth of women questioned admitted they did not know how to fund their retirement, with only 40% enrolled in DB funds, compared with 45% of the male workforce.

Additionally, men are more likely to have private pension provision, with 56% market share compared with only 47% for women.

Aisling Kennedy, retirement consultant at Mercer, warned that women on average spent more than a decade in the workforce, but as they lived longer, their financial needs were greater.

"Women need to be more single-minded about their financial future," she said.

"Family life typically dictates that it is the female partner that leaves the workforce for a period, quite often at the peak of her earning capacity."

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