# BOI Final Dividend Stock Alternative Option



## noggy1810 (16 Jun 2008)

I am an investor in Bank of Ireland and have been reinvesting my dividends with their stock alternative scheme. I was going to do the same with recent dividend but am being offered shares at E8.10 a share. As of 1pm today they are trading at E6.88 nearly a 15% discount on this price. Why would anybody but something for such an inflated price. Think I'll take the cash. Any opinions?


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## ShaneMc (16 Jun 2008)

noggy1810 said:


> I am an investor in Bank of Ireland and have been reinvesting my dividends with their stock alternative scheme. I was going to do the same with recent dividend but am being offered shares at E8.10 a share. As of 1pm today they are trading at E6.88 nearly a 15% discount on this price. Why would anybody but something for such an inflated price. Think I'll take the cash. Any opinions?


 
received the documents on Friday too. Normally take the stock but like you say no point this time. Threw the form in the bin.

Obviously if the price rockets before the deadline I'll lose out, but I'm pretty confident I'll be okay!


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## wigwam (16 Jun 2008)

however you're acquiring shares at a very good price without having to pay stamp duty......


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## Kemo_Sabe (16 Jun 2008)

wigwam said:


> however you're acquiring shares at a very good price without having to pay stamp duty......


 
the stamp is 1%!

how is 8.10 a good price compared to 6.80 + .068 = 6.87?


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## Ravima (16 Jun 2008)

factor in stockbrokers fees too!


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## noggy1810 (16 Jun 2008)

Assuming stamp duty of 1% and stockbroking fees of 1.5% these shares are being bought at E7.90 which is still over 16% more than their current market value. As much as I want to keep investing I don't want to be a mug.


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## MugsGame (16 Jun 2008)

It's more complicated that. Suppose you take the cash dividend with the intention of buying shares. You'll pay income tax on the dividend, stamp duty and fees on purchase, and capital gains tax on any increase when selling the shares. Whereas if you take the shares your base price for CGT purposes will be a lot higher. So there might be scenarios where it makes sense to take scrip dividends at above market rates. Though it still doesn't sound like this is one of them 

Update: it looks like you do pay [broken link removed], so what I've posted above is misleading.


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## TarfHead (17 Jun 2008)

Unless I read the accompanying documentation incorrectly ..

.. taking the dividend as stock also incurs an income tax liability. The value of the stock/dividend is treated, for income tax purposes, the same as cash.

The liability arises when you declare the amount in your tax return.


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## vipera1 (17 Jun 2008)

I've some BOI shares held in a nominee account with AIB/ Goodbodys. For dividends, I've taken shares up till now.  Without viewing this thread I wouldn't have noted the high price of the shares option....No communication from AIB on this !! I've written to them today requesting a cash option instead.


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## RedDevil (17 Jun 2008)

It is the same with Anglo Irish Bank shares
Take the cash and buy them cheaper


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## Daddy (18 Jun 2008)

I have received no notification regarding the dividend option yet.

Some of you have - should I be inquiring on this.


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## DACMAN (18 Jun 2008)

Recieved document via Goodbody last week - reply had to be back by 23rd July


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## ShaneMc (18 Jun 2008)

DACMAN said:


> Recieved document via Goodbody last week - reply had to be back by 23rd July


 
Do you get this for every dividend or do you just get it once and then automatically re invest all?


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## DrMoriarty (24 Jun 2008)

vipera1 said:


> I've some BOI shares held in a nominee account with AIB/ Goodbodys. For dividends, I've taken shares up till now.


I'm in the same position, but with Fexco, and have only _today_ received the relevant communication (although their covering letter is dated 18th June). The letter states that if I want to lift the DRIP mandate I must instruct them 'at least a week prior to any closing date with the registrars', which is now no longer possible. I plan to ring them first thing tomorrow and see what they say.

BoI shares are now trading at 5.90, over 25% off the quoted price of 8.10...


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## vipera1 (24 Jun 2008)

DACMAN said:


> Recieved document via Goodbody last week - reply had to be back by 23rd July


 
should this read 23rd June


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## Mizen Head (24 Jun 2008)

Doc
I called Fexco today and they said No Prob re lifting my Mandate


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## Brendan Burgess (24 Jun 2008)

Just for clarification

This thread does _not _break the Posting Guideline of not discussing the valuation  of individual shares. 

It is a practical question and answer on the correct strategy relating to a decision. 

It makes no sense to buy the Bank of Ireland scrip issue while the share price is priced well below it. In fact, I wonder if Bank of Ireland has the right to pull the scheme for everyone? 

Brendan


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## Daddy (25 Jun 2008)

I still have not received any communication regarding the final dividend.

If I do nothing is it cash I get or scrip div.


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## philips (25 Jun 2008)

Not just BOI shareholders that are affected..............I received notification yesterday from Standard Life that I had increased my shareholding by XX no of shares purchased about £2.50 a share on 6 June. They are trading at £2.23 today.


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## DrMoriarty (25 Jun 2008)

Mizen Head said:


> Doc
> I called Fexco today and they said No Prob re lifting my Mandate


Thanks, Mizen Head — same here, I'm glad to say. The guy I spoke to, as soon as I uttered the words "Bank of Ireland" and "DRIP mandate", practically finished my sentence for me! 

Daddy, unless you previously signed up to the DRIP scheme you should automatically get cash. But if you still haven't received any documentation by now you should probably contact the registrars (or your stockbroker) anyway.


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## Daddy (25 Jun 2008)

Thanks Dr.

For the interim dividend I took the additional shares but I would have thought the options would be put to me again for the final dividend.  Will contact brokers as you say.


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## Brendan Burgess (26 Jun 2008)

Bank of Ireland has just announced that they will only be paying a cash dividend this time as the share price has fallen so much. 

Good decision by them. 

Future dividends will be cash or shares as before.

Brendan


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## karly (26 Jun 2008)

I see that the option has now been withddrawn.I have been buying shares in BOI every month since Jan.Can someone tell me on what date they pay they pay dividends?


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## LDFerguson (26 Jun 2008)

Our Brendan told them what to do.


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## Protocol (26 Jun 2008)

To find info on BoI dividends, I looked at the BoI website: www.boi.ie

I saw a section on _Investor_ _Relations_, at: [broken link removed]

In this section, I saw a link to Financial Calendar: Dividends, at:

[broken link removed]

which gave me the following info:

Ordinary Stock
15 Jan 2008 Dividend Payable On or After
28 May 2008 Stock goes Ex-Dividend on Irish Stock Exchange
30 May 2008 Record Date
23 Jul 2008 Dividend Payable on or after
19 Nov 2008 Stock goes Ex-Dividend on Irish Stock Exchange
21 Nov 2008 Record Date
13 Jan 2009 Dividend Payable on or after


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## Protocol (26 Jun 2008)

I own BoI shares, and hold them in an NIB online custody account.

I usually choose to receive the divs in the form of shares, not cash.

I received a note from NIB today, with the following details:

Gross div = 39.4c
Net div = 31.52c

I have 179 shares on 28 May 2008, and so my total net div = EUR 56.42.

If I go for shares, I may get 8 new shares, plusa fraction to be rec'd in cash. They mention a share price of 6.37 on 20th June 2008.

This seems like an ok deal.

It appears that I am not being offered shares at 8.10 each, as mentioned above.

So I am not in the scrip offer????


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## MugsGame (26 Jun 2008)

Scrip offer rescinded - this dividend to be cash only
http://www.rte.ie/business/2008/0626/boi.html.

Sorry - see that's already been posted above.


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## San Martino (27 Jun 2008)

I also have an online account with NIB. The letter I received talks about an allocation ratio of 20.558375 shares for 1. Given that the net dividend is 31.52 cent does this not imply an expected price of €6.48?

Also, I always assumed that these dividend reinvestment shares were purchased on the market (or from treasury) at the market price on the payment date - in this case the market price on July 23rd next?

Is this not the case? 

Cheers, San Martino.


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## DrMoriarty (27 Jun 2008)

It depends on the individual DRIP scheme, but off the top of my head I think the share price offered tends to approximate to the average price over the six months preceding the entitlement date — or something along those lines (I haven't the documentation to hand).

I'm intrigued by the details of the NIB system, which must be of their own devising rather than an official BoI DRIP plan _per se_?


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## Protocol (28 Jun 2008)

Yes, DrM, I also thought that the NIB scheme was their own scheme.

Yet when I rang them today, they said no shares as div, just cash, as per the announcement.  I'm a bit confused.


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## San Martino (28 Jun 2008)

Interesting issue.... I got BOI shares via NIB & the share reinvestment plan last January 15th - they were allocated at €9.28, which appears reasonable compared to the closing market price of €9.43 (I'm not sure what the volatility was during the day). 

Up until now I would have always reinvested dividends where that option was available, but in future I'll be checking the rules of each DRIP

Thanks for the info,

San Martino


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