Bank of Ireland leaps 28% on bailout boost

Bank of Ireland shares jumped 28% on the London stock market today as it emerged as the only member of the government's "bad bank" scheme which will escape a further taxpayer bail-out.

The bank today reported a loss of 1.47 billion (£1.31 billion) for the final nine months of 2009 as it booked impairment charges of just over 4 billion on bad loans.

The news followed last night's announcement by finance minister Brian Lenihan that the state's "bad bank", the National Asset Management Agency, would take on 1.93 billion of Bank of Ireland's loans and ultimately assume a total of 12 billion of the bank's balance sheets.

The value of Bank of Ireland's bad loans was discounted by 35%, which the bank will record as a loss. But it fared better than other banks, which on average had their bad loans discounted by 47%.

Bank of Ireland said it will now go ahead and raise 2.7 billion of new capital from shareholders rather than from the taxpayer. That contrasts with Anglo Irish Bank, which is to get another 18 billion cash injection from the state.