Fidelity Investments sells part of Bank of Ireland stake

Fidelity Investments, which was among the group of North American investors that took part in a €1.1 billion rescue investment in Bank of Ireland in 2011, has since sold more than 40 per cent of its stake.

The world’s fourth-largest mutual funds manager, which bought 2.79 billion shares, or a 9.3 per cent stake, in the Irish bank almost six years ago has since cut its holding to 1.59 billion shares, or a 4.9 per cent stake.

Fidelity Investments’ latest share sale was disclosed to the stock market last week. It remains the bank’s third-largest shareholder.

The Boston-based fund manager had previously sold stock in early 2012 and late last year, while its stake was watered down slightly as Bank of Ireland placed stock in the market in 2013 to help pay back part of its taxpayer bailout.

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US billionaire

Fidelity Investments' Bank of Ireland share sales have not gained the same level of attention of those of US billionaire Wilbur Ross, who made an estimated €500 million profit selling his 9.3 per cent stake in the group between 2013 and 2014. Various moves by Canada's Fairfax Financial Holdings to cut its position from 9.3 per cent to 1.5 per cent, with the latest trade going through in December, have also been widely reported.

Fidelity Investments, Wilbur Ross's company WL Ross and Fairfax were the three main investors among a group of five that took a 35 per cent stake in Bank of Ireland in July 2011, saving the group from falling under the control of the State like the rest of the country's main lenders as their loan losses soared during the financial crisis. The Capital Group and Kennedy Wilson, both based in California, each took smaller stakes.

Mr Ross was confirmed last week as US president Donald Trump’s commerce secretary.

The latest share sale came a week after Bank of Ireland, led by chief executive Richie Boucher for the past eight years, reported a 16 per cent reduction in pretax profit to just over €1 billion for 2016 and postponed a return to paying a dividend until next year. The group has not made a payment to shareholders since 2008.

However, the bank managed to reduce its level of defaulted loans by 35 per cent to €6.9 billion and shrink its pension deficit in the fourth quarter to €740 million from €1.45 billion.