By far the less complex of the two holdings is Bank of Ireland plc (LSE:BIRG, Financial) (“BoI”). During 2019, BoI continued to dispose of portfolios of non-performing assets crossing a self-imposed goal of less than 5% of total assets, cleaning up the last vestiges of the Global Financial Crisis. BoI is also in the midst of substantial investment in one of the industry’s most comprehensive technological upgrades, and has still managed to build meaningful capital during the year over and above the spending. Once the investment period is over, BoI’s cost structure is intended to be fundamentally lowered and its reinvestment needs substantially reduced. Finally, BoI sold its UK credit card business during the year further simplifying the bank into its core competencies and areas where reasonable returns can be earned. We are, to date, quite pleased with actions taken by BoI management and remain of the view that the bank is deeply undervalued.
From Third Avenue Value Fund (Trades, Portfolio)'s fourth-quarter 2019 shareholder letter.
