The pensioner risking everything in his battle with ‘pernicious’ Bank of Ireland

By Simon Watkins for The Mail on Sunday

Pensioner Albert Kempster is heading for a High Court showdown with the Bank of Ireland this week in a case that will test its power to impose a massive loss on a group of bond investor s – and could lead to him being declared bankrupt.

Kempster, 73, is one of more than 2,000 retail investors who own permanent interest bearing shares (Pibs) that the bank wants to force them to sell at just 20 per cent of their cover value.

Lawyers acting for Kempster are hoping for a verdict by Friday.

Albert Kempster, victim of Bank of Ireland bond price collapse

It's unfair: Pensioner Albert Kempster is just one of thousands facing a loss

Kempster, from Glasgow, bought £24,000 worth of the Pibs in 2009. The Bank of Ireland is offering to pay him just £4,800 for them. Pibs, a hybrid investment that combined features of a bond and a share, were widely issued by building societies as a way of raising extra capital.

Kempster bought Pibs that were originally issued by Bristol & West Building Society, but the society was taken over by the Bank of Ireland in 1997.

Now the crisis-hit Irish lender is trying to buy them back at a fraction of their face value as part of a restructuring of its shattered balance sheet.

Pibs holders have been offered a choice of taking Bank of Ireland shares worth 40 per cent of their Pibs or cash worth 20 per cent.

However, under EU rules, the bank is allowed to offer only the cash option to investors who own less than 50,000 euros (about £44,300) worth.

About 2,400 investors hold less than £1,000 worth of Pibs so will be among those obliged to accept the much lower payout.

Kempster said he recognised he had taken a risk in buying the Pibs and was not claiming he should not face any loss, but believed all holders should be treated the same. 'People should not be treated like this. It's pernicious,' he said. Kempster, who lives on a pension of £230 a month, supplements his income working at a courier company and has no other savings.

If he loses the case he could face paying Bank of Ireland's legal costs, which would almost certainly bankrupt him.