Bank of Ireland shareholders have voted to delist from the London Stock Exchange and to make an offer to buy out thousands of legacy shareholders with tiny holdings after its crisis-era bailouts diluted their stakes.
Shareholders passed the resolutions at the lender’s annual general meeting (AGM) at the Intercontinental Hotel in Dublin on Thursday.
The bank said it will take steps to cancel the listing of its remaining ordinary shares on the London market over the coming weeks, with the process expected to be completed on Monday, June 29th.
Bank of Ireland’s main listing is in Dublin, which will be unaffected by the move.
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Shareholders also gave the green light for a so-called odd-lot offer to buy out holders of 30 or fewer shares, who, combined, equate to 35 per cent of all shareholders but only 0.03 per cent of issued share capital.
Meanwhile, the bank’s chairman told the meeting that its subsidiary, Davy Stockbrokers, “cannot be charging” customers quarterly brokerage fees of €50 as well as commission fees that are much higher than those levied by online brokers, if it wants to capitalise on the Government’s proposed savings investment account (SIA) scheme.
The SIA scheme, which Tánaiste and Minister for Finance Simon Harris confirmed on Tuesday would be unveiled in October’s budget, could attract as much as €7 billion of investment from Irish households in its first year, according to industry estimates.
One shareholder told Thursday’s meeting that Davy charges quarterly fees of €50 plus transaction fees that are “astronomical” compared with those charged by online broker platforms.
“Billions are going to go into these savings investment accounts,” the shareholder said. “More and more people are going to be using online brokerages, and they’re not going to be using Davy.”
Responding to the question, Bank of Ireland group chairman Akshaya Bhargava said the shareholder was “absolutely correct”.
“We cannot charge people €50 [per quarter] and expect everyone to invest, because these are small investments,” he said. “We will have to come up with a tailored kind of service.”
In its three-year strategy, published in March, Bank of Ireland said it is targeting 3 per cent and 10 per cent compound annual growth in deposits and assets under management (AUM), respectively, over the next three years.
Expanding the lender’s wealth management business is key to achieving that target.
Bank of Ireland chief executive Myles O’Grady wants to grow the lender’s AUM from about €60 billion to €75 billion in 2028, to €100 billion in 2030.
O’Grady told shareholders the bank wants to cast a wider net with its wealth strategy over the coming years. Bank of Ireland will expand its product offering to cater, “not just to high net-worth customers, but moving into mass affluent and maybe the mass market as well”, he said.
He said the group is “very supportive” of the Government’s SIA initiative.
O’Grady said Davy and Bank of Ireland’s wealth team are “actively working” on an SIA platform. “The objective is to have that platform live to coincide with the introduction of a new offering to the Irish population,” he said.
He said ease of access and affordability are the bank’s main objectives in developing the platform.
