Bank of Ireland Sheds Vestiges of Financial Meltdown

Jacob Harper |

On March 19 one of Ireland’s largest lenders, the Governor Company Bank of Ireland (IRE) announced that they would not be appointing the recently departed head of their “non-core division” that was responsible for selling 10 billion euros ($13.8 billion US) worth of foreign loans, suggesting the bank has finally rid themselves of those risky assets.

Denis Donovan was appointed to the post in Feb. 2009 as the bank struggled to recover from the financial meltdown that rocked the world, and hit the Bank of Ireland especially hard. Donovan served for five full years before stepping down last month.

The Bank of Ireland has been one of the major success stories of the last twelve months, and is the best performing foreign lender trading on the NYSE this year, as they were in 2013 as well. Concomitant with the overall recovery of the Irish economy, Bank of Ireland has been spurred by the shedding of toxic assets and the effective management of its NAMA, or “bad bank” loans.

The bad bank strategy is designed to sequester a lender’s toxic loans in another entity, a sort of addition by subtraction that has previously proven successful in other Eurozone-members like Slovenia and Spain, and has been proposed and engendered excitement in Greece.

Despite the run, the last analyst to weigh in on the company was rather bearish. Credit Suisse downgraded shares of the company on Feb. 6, lowering their rating to “underperform.”

While Bank of Ireland’s run has cooled over the last month as compared to its fantastic 2013 and early 2014 performance, the lender is still chugging along. By midday trading on March 20 shares of Bank of Ireland had risen .67 percent to hit $19.66 a share. The company’s stock is up 35.53 percent on the year, and 127.89 percent since the same time a year ago.

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