Bank of Ireland was founded in 1783 and the former premises of the defunct Irish Parliament at College Green, Dublin, were purchased for £40,000 in 1803.

The European Commission today approved under EU state aid rules the restructuring plan of Bank of Ireland which was rendered necessary by the Irish State €3.5bn recapitalisation of the bank in 2009 and other state aid assistance. The Commission said is satisfied that the plan is in line with its communication on the restructuring of banks during the crisis. In particular, the restructuring plan foresees that B0I will pay a significant proportion of the restructuring costs, thereby limiting the distortions of competition. The EC says the plan furthermore ensures a sustainable future for the bank without continued state support.

Commission Vice President in charge of competition policy Joaquin Almunia said: "I am confident that this plan will ensure a stable future for Bank of Ireland and contribute to financial stability in Ireland without unduly distorting competition. The good collaboration with the Irish authorities and the bank allowed us to achieve measures that will further open the banking market and facilitate entry and growth of market challengers."

As regards the restructuring plan, the Commission concluded that it fulfilled the criteria of the Restructuring Communication, as it will lead to a restoration of viability of Bank of Ireland, as there is sufficient own contribution and burden sharing by the bank and as there are sufficient measures limiting the distortion of competition.

In particular, in order to contribute to the costs of its own restructuring and to limit the distortions of competition created by the aid, Bank of Ireland will reduce its presence in certain market segments through the transfer or winding down of assets and through divestitures, according to the plan.

The bank will notably significantly reduce its presence in the UK corporate lending market after two of its current loan portfolios will be run down. In Ireland, it will sell its New Ireland Assurance Company plc, its mortgage brokering business ICS Building Society and the 17-per cent stake it owns in Irish Credit Bureau.

In order to enhance competition, the bank will also offer certain services to new entrants or to small banks already active in Ireland to reduce the cost for competitors to develop business in Ireland. This comprises a "Service Package", with back-up services and access to its ATM network, and a "Customer Package" to help reduce the costs of acquiring new customers that involves Bank of Ireland presenting customers with alternative services for their current account and credit card products.

Finally, the EC says the Irish authorities committed to a number of market opening measures in order to enhance competition in the Irish banking market by facilitating the entry and expansion of competitors and by increasing consumer protection in the financial sector. This will include for example measures enhancing customer mobility between banks, including by being able to compare costs, and furthering electronic banking.

The Minister for Finance, Brian Lenihan TD, welcomed the approval of the Bank of Ireland’s Restructuring Plan by the European Commission today under EU State aid rules: “The EU Commission approval for the Bank of Ireland’s Restructuring Plan is a further endorsement of the Government’s strategy for the recovery of the banking sector in Ireland. Bank of Ireland, following its recent successful Rights Issue is now a strongly capitalised bank, maintaining a diversified business profile that is making an important contribution in supporting economic activity in the economy and overall economic recovery.

I am very grateful to Commissioner Almunia and his officials in the Commission for their work and commitment to bring the Bank’s Restructuring Plan to finality and look forward to continued successful co-operation in advancing the restructuring plan process for the other institutions”

The Minister noted that today’s Commission Decision follows several months of detailed analysis and assessment of the plan involving the European Commission, Bank of Ireland and the national authorities.