Bank of Ireland plans to move away cautiously from state support by
showing it can raise debt outside a government guarantee and gradually
repay taxpayers’ funds over several years, it has announced.

Ireland’s biggest bank by market value has become the first major Irish bank to
replenish its capital from partly private sources, an exercise which
left the state with a 36 percent stake plus preference shares.

Its underlying operating profit fell by 32 percent in the first half of
2010 but it said tough conditions were set to stabilise or improve this
year with the nascent recovery in its main markets Ireland and the UK.

Allied Irish Banks, still trying to raise the 7.4 billion euros ($9.73bn) of
capital asked by regulators, last week said it needed continued
government help and that the guarantee for bank liabilities should be
kept beyond the current year-end expiry.

Bank of Ireland Chief Executive Richie Boucher said his bank could
carefully move to regain its independence.

“With the recapitalisation we’ve done, the EU endorsement of our
(restructuring) plan, us passing the stress tests leaves us with the
capability to seek to get off the guarantee,” Boucher told journalists.

“That’s one of our very, very important strategic objectives,” Boucher
added.

Boucher’s cautious optimism contrasted with fully nationalised Anglo
Irish Bank, which recently said the government guarantee should be extended
into next year and which has received EU approval for a fresh bailout of up
to 10 billion euros.

Ireland’s bank guarantee scheme was introduced at the beginning of the global
financial crisis in September 2008 and the EU has approved an extension until
the end of 2010 for debt over three months duration.

Bank of Ireland said it aimed gradually to pay back the state’s 1.7 billion euros
worth of preference shares in the next three years, although it said it had no
control over the 36 percent stake the government owns in ordinary shares.