Bank of Ireland PLC (IRE) said Tuesday that fiscal full-year net profit slumped due to restructuring and impairment loan charges, announced the resignation of its governor and said it will purchase up to EUR3 billion in outstanding securities.

In a surprise announcement accompanying its results, the bank announced tender offers relating to six Tier 1 securities with a nominal value of around EUR3 billion. The indicated maximum size of the tenders is a nominal EUR1.4 billion.

Bank of Ireland said the bonds have been trading at significant discounts to par value and it is buying them back in order to generate a profit. The bank expects them to be "equity accretive."

Separately, the bank's Governor Richard Burrows announced his retirement from the Annual General Court in July 2009. "Accountability for these losses must be taken at the top," the governor said in a statement.

The bank sees loan impairments rising to EUR6 billion from EUR4.5 billion in the three-years to March 2011, citing a change in the economic forecasts in Ireland where 50% of the credit risk on the bank's lending portfolio is based.

"This is based on existing economic forecasts," Chief Executive Officer Richie Boucher told Dow Jones Newswires in a post-results briefing. "Based on further stress testing, we believe we will be adequately capitalized," he said.

In Ireland, the impairment charge rose to 129 basis points versus 28 basis points last year. Of the increase in the charge to EUR708 million from EUR129 million, 10% related to residential mortgages, 12% to consumer lending and 78% to property and construction.

Boucher said that the bank faces "another difficult financial year" in the 12 months to March 31, 2010.

The bank posted a net profit of EUR59 million in the 12 months to March 31, 2009, down from a net profit of EUR1.68 billion a year earlier, while operating income fell 5% to EUR3.9 billion, and underlying earnings-per-share fell 80% to 30.2 cents versus 150.3 cents last year.

It posted a pretax loss of EUR7 million versus a profit of EUR1.93 billion after several costs, including EUR304 million in impairment of goodwill and other intangible assets and EUR83 million in restructuring charges.

Before these charges, pretax profit fell 81% to EUR332 million from EUR1.79 billion last year.

But were pleased that it wasn't worse. At 0730 GMT, shares were up 22.5% at EUR1.32 on the Irish Stock Exchange. But Irish banking shares are volatile and they are still down from EUR8.69 this time last year.

In relation to the structure of the new National Asset Management Agency, Boucher said that none of the perceived legal issues are "insurmountable" as long as the government's approach is "pragmatic and sensible." He said, "The government has to be cogniscent of E.U. rules."

Boucher said that at least EUR12.2 billion of land bank and commercial property development loans will be covered under NAMA, but said it isn't clear whether all those loans will be transferred or managed by NAMA.

The bank is part of the government's EUR440 billion industry deposit guarantee and received EUR3.5 billion in capital from the government in return for a 25% stake. The government has said it will take a controlling stake in Bank of Ireland or Allied Irish Banks PLC (AIB) if necessary.

However, Group Financial Officer John O'Donovan said it was "dramatic" to assume that the government will take a majority stake in Bank of Ireland after assets have been transferred to NAMA, the so-called bad bank.

Boucher added that the bank's engagement with the government has been "positive, realistic, pragmatic and sensible." But he said the bank's property assets may come under further due diligence by the government.

Merrion Capital said it was premature to consider Bank of Ireland "investable" until greater certainty emerges about potential losses to be crystalized on transfer of assets to NAMA. Merrion has a hold on the stock.

Company Web site: http://www.bankofireland.com

-By Quentin Fottrell, Dow Jones Newswires; 353-1-676-2189; quentin.fottrell@dowjones.com