Bank of Ireland has closed a deal that will see a group of five international financial investors acquire a 34.96 per cent stake in the company for €1.123 billion.

Fairfax Financial Holdings, WL Ross, Capital Research and Management Company, Fidelity, and Kennedy Wilson purchased shares from the National Pension Reserve Fund, which is holding the stock on behalf of the State.

The move reduces the Government’s holding from 42.1 per cent to 15.1 per cent and keeps Bank of Ireland outside majority State ownership.

Minister for Finance Michael Noonan welcomed the acquisition.

"The commitment by a number of significant private sector investors to invest side by side with the State’s retained holding without any form of additional risk sharing by the State reaffirms the Government’s banking policy as announced on March 31st, 2011," he said.

"It further underlines how we are successfully breaking the link between bank risk and the Sovereign.”