Bank of Ireland shareholders today overwhelmingly voted in favour of a plan to raise €3.56 billion in fresh capital.
The bank held an extraordinary general meeting today, where shareholders were asked to vote for the plan which includes a rights issue to tap existing investors for €1.72 billion.
The bank is offering retail shareholders the chance to buy new shares to raise €1.1 billion of this while a further €627 million will come from the conversion of part of the State's €3.5 billion preference share investment to ordinary shares.
Shareholders are being offered three new shares for every two they own at a discount price of 55 cent a share.
Shareholders also called for a change of management and the board, and queried when the bank would start paying dividends again.
While some shareholders were determined to fight the plans, others claimed the move was unavoidable.
"They have the big corporate companies behind them so it is a no-win situation for the small shareholders,"
Mary Fitzgerald (73) said.
"I'm so disappointed because over the years my husband worked very hard and so did I.
"We did not take our dividends, we took shares instead so we would be comfortable in our old age.
"Here they are now looking for our money."
Michael O'Rourke from Clane, Co Kildare bought his shares three years ago after illness prevented him from working.
The 59-year-old said he had no faith in the bank's current chiefs.
"They're double crossers and parasites — we were the people that held the thing up and put our faith in it," he added.
"Now my shares are worth nothing and I'm having to get more money to try and save myself."
The bank's governor Pat Molloy said that he would judge the management team on their performance and he felt that the executive team were "doing extraordinarily well".
He said the board of the bank was changing by rotation - four directors have stepped down and two more were resigning after the annual meeting this afternoon.
The bank's "unrelenting focus" was on increasing the share price and to start repaying dividends, he said, but that the bank could not make payouts to shareholders until 2012. The bank would restore dividends "as quickly as possible" after that, he said.
The State will be left with a stake of 36 per cent after the capital raising. Mr Molloy said that no pre-determined decision had been made for the State to sell on its stake.
Mr Molloy said he expected taxpayers would eventually be repaid "handsomely" for the State's stake in the bank.
Asked why the bank was not selling some of its businesses to raise capital ahead of tapping shareholders, Mr Molloy said the sale of these businesses would not in themselves meet the capital needs of the bank.
Bank of Ireland will become "a very much more prudent institution and a very much more boring institution", he said.
The Financial Regulator has demanded that the bank raise €2.66 billion in capital. The capital raising will boost capital by €2.94 billion and limit the Government's ownership of the bank to 36 per cent.
Investors who do not hold shares in the bank can take part in the rights issue by buying shares traded with entitlement to participate in the rights offer. The bank's stock can be traded with the entitlement to participate until 8am tomorrow.
The results of the rights issue will be announced on June 9th, a day after subscriptions end.
