**The Irish Republic’s largest bank has unveiled huge losses and said it needs to raise 2.7bn euros ($3.6bn; £2bn) to see it through the recession.**Bank of Ireland (BoI) will raise the new capital privately from investment firms and also from the Dublin government’s “bad bank” agency.
The Republic’s banks have a capital shortfall of up to 32bn euros, the finance ministry said on Tuesday.
BoI also reported a loss of 1.8bn euros for the nine months to 31 December.
BoI said in a statement: “The bank believes that it has a robust investment case to enable it to raise a substantial amount of the incremental capital required by the Financial Regulator from private sources, including existing shareholders.”
‘Strong future’
As part of the fund-raising, the Irish government is converting its preference shares in BoI to ordinary shares, but expects to remain a minority shareholder.
Irish Finance Minister Brian Lenihan said: “I believe that Bank of Ireland has a strong future. In recapitalising Bank of Ireland, we will secure an institution that will maintain a presence in the international capital markets, provide loan finance to individuals and businesses and support our economic recovery.”
On Tuesday, Dublin announced that it would inject another 8.3bn euros into the nationalised Anglo Irish Bank.
Mr Lenihan said pumping in more money was “the least worst option”.
The Irish government owns 25% and 16% stakes in Allied Irish Banks and Bank of Ireland respectively.
Meanwhile, European Union regulators have launched an investigation into Dublin’s help for Anglo Irish, warning that the bank must draw up a new business plan and “restructure profoundly”.
Housing boom
Anglo Irish was one of the biggest lenders during the housing boom that ended abruptly in 2008 and forced all the country’s major financial groups to seek government help.
The EU’s competition commissioner, Joaquin Almunia, said he could approve the latest Anglo Irish aid for six months, but the bank must hand in new restructuring proposals by 22 June.
Irish Nationwide Building Society, which has also received extra aid, must also submit restructuring details.
Allied Irish Banks (AIB) has confirmed that First Trust, its bank in Northern Ireland, is up for sale as part of its efforts to raise 7.4bn euros.
The bank is transferring 23bn euros worth of loans to the Republic’s National Asset Management Agency, formed to took control of toxic assets, at an average discount of 43%.
In order to raise funds to offset this shortfall, AIB is selling its divisions in the UK, Poland and the US. The company says it expects the sales to meet a substantial part of their overall need for capital.This article is from the BBC News website. © British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.