How FBD Trust won big on FBD shares

Last week FBD plc, the insurance company, published a strong set of half-year results. Profit before tax increased to €43m from €17m in the same period last year.

Insurance revenue grew by €18m to €253m, while the key solvency capital ratio (SCR) increased slightly to 203%.

The company announced a special dividend of 75c per share, which will be paid in addition to the annual dividend of €1 per share announced in March.

On the Dublin stock exchange, shares in FBD rallied to trade above €18, more than double the price seen at the start of 2022.

These strong results, the subsequent share rally and the announcement of the special dividend is great news for FBD plc’s shareholders.

Farmer Business Developments plc, the owner of the FBD Hotels group, holds just over 8.5m ordinary shares of the insurer, accounting for almost a quarter of the shares outstanding, while the FBD Trust’s most recent holding was reported at 5,383,930 ordinary shares in March 2026.

Of those two shareholders, the FBD Trust is by far the most interesting. The charity has significantly increased its holding in FBD plc in recent years (see Figure 1).

This purchase of shares, which was at least partially funded by borrowing, raised a few eyebrows when it began in 2023.

In August of that year, the charity changed its constitution, including among its objectives to working “in partnership with FBD Insurance plc, to complement its insurance business, for so long as [FBD Trust] is satisfied that FBD Insurance plc’s objectives and policies are aligned with the company’s own objectives”.

In practice, that change in the constitution has meant the trust began buying shares in FBD Insurance plc.

Buying shares is risky; borrowing money to buy shares is very risky and would never be recommended by any financial adviser.

However, in this case, the tactic seems to have worked out very well for the trust.

The total amount the trust borrowed to purchase shares in FBD Insurance plc was €17m. By the end of 2024, the balance outstanding on that loan had been reduced to €10m.

While the loan balance was falling, the value of the shares rose. At the start of 2023, before the changes were made to its constitution, the FBD Trust’s shares in FBD Insurance plc had a market value of €32.4m.

The increase in the value of each share since then coupled with the number of shares purchased by the trust puts the market value of its shareholding in FBD Insurance plc at €94.2m this week, a 190% increase (see Figure 2).

FBD Insurance plc dividend payments to shareholders were either small or non-existent until 2022. However, in recent years they have ramped up considerably.

Annual and special dividend payments per share totalled €2 in 2023 and 2024, and €1.75 in 2025.

The announcement last week of the special dividend of 75c per share also puts the 2026 payout at €1.75.

FBD Trust’s enlarged shareholding means that the charity is on track to earn €9.42m in dividend payments this year (see Figure 3).

As well as its holding in FBD Insurance plc, the FBD Trust holds shares in Farmer Business Developments plc. That company has, in recent years, paid special dividends from FBD Insurance plc to its shareholders.

This means that the trust also benefits through that holding from dividend payments by FBD Insurance.

When we first wrote about the FBD Trust borrowing money to increase its holding in FBD Insurance plc shares, we did our best to make it clear that borrowing money to buy shares is never a good idea.

That being said, in this particular case, it has worked out very well for the trust. The trust will publish its annual report for 2025 in the coming weeks and that will show significant growth in assets and accumulated surplus during the year.

As the trust is a charity, this is good news for Irish agriculture as a whole because it gives the trust considerable firepower for supporting Irish agricultural and rural causes. Investment income of around €10m per year is far ahead of what the trust had seen in previous years, and is also far ahead of the level of the trust’s historical charitable spending.

It might be in the trust’s best interests – and the long-term interest of the causes it funds – for some of the cash it has to be used to diversify its investment portfolio. While it has done very well out of its FBD Insurance holding, it does face significant concentration risk.

Fundamentally, the trust’s financial performance is almost completely tied to the performance of FBD Insurance. The extra cash it has earned over recent years could be used to widen its investment portfolio, which would give it some diversification and reduce the risk it faces from having all its eggs in one basket.