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Bank of Ireland to establish holding company to comply with bail-in rules

Bank of Ireland said March 31 that it plans to establish a new listed holding company, Bank of Ireland Group Plc, to comply with European rules on bank resolution.

The move comes after the European Central Bank's Single Resolution Board said it should set up a holding company to enable its resolution via a so-called single point of entry bail-in strategy.

The new structure is expected to take effect in July and will also involve a share consolidation plan, subject to approval from both shareholders and the High Court of Ireland.

Under the reorganization, Bank of Ireland Group Plc will become the 100% owner of the ordinary stock in the Bank of Ireland, which is currently officially listed as the Governor and Co. of the Bank of Ireland. The share consolidation plan entitles ordinary stockholders to receive one new Bank of Ireland Group share for every 30 units of ordinary stock held in the currently listed entity.

Ordinary stockholders' ownership in the group will not change as a result of the reorganization. The new holding company will also have the same board of directors, committee structures and management as the bank.

The bank noted that the new structure may adversely affect the consolidated group's reported total Tier 1, total capital and leverage ratios. However, it is not expected to affect the group's reported common equity Tier 1 ratios.