Bank of Ireland

In August 2011, investor Wilbur Ross, through his firm WL Ross & Co LLC, participated in a consortium that raised $1.6 billion to acquire a 35% stake in the Bank of Ireland, amidst skepticism about the viability of investing in an Irish bank post-economic collapse. Following its rapid growth in the late 1990s, Ireland faced a severe downturn from 2008, largely due to a real estate market collapse and the subsequent drying up of foreign capital, which left its banks on the brink of failure. Government interventions included a massive guarantee of bank deposits, the creation of the National Asset Management Agency (NAMA), and asset purchases at significant discounts, all aimed at stabilizing the financial sector.

However, with economy-threatening bank debts converted to government liabilities and limited currency devaluation options, Ireland ultimately sought a bailout from the European Union and the IMF. The resulting package of 85 billion euros required severe austerity measures from the Irish government. Despite these challenges, Ross, who believed in Ireland’s long-term recovery, viewed the Bank of Ireland as a strategic investment opportunity. By late 2013, the bank was nearing profitability, having returned significant funds to the state, and the share price increased markedly. Nonetheless, residual macroeconomic challenges, slow economic recovery, public scrutiny of bank management, and regulatory risks remained, posing ongoing threats to investment stability in the Irish banking sector.

Developed in partnership with UCD Michael Smurfit Graduate Business School and IE Business School