Bank of Ireland managers show confidence in housing market

Top managers in Bank of Ireland appear to have become more optimistic about the Irish housing market last year.

The number of "key management personnel" with home loans out from the group's Bank of Ireland Mortgage Bank unit rose to 17 at the end of last year from 13 a year earlier, according to the company's latest annual report, filed recently with the Companies Registration Office.

The amount out on loan to the senior managers rose to a maximum of €11.1 million last year, from €9.2 million.

Irish residential prices rose 8.1 per cent last year. The latest data from the Central Statistics Offices shows that house-price inflation was running at 9.6 per cent in March.

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The report also showed that the group's deputy governor, Patrick Kennedy, former chief executive of bookmaker Paddy Power, had an outstanding mortgage balance with the bank of €2.82 million in December.

The figure is more than double the second-largest sum out to a company director and is unchanged from the start of the year even as he made 17 repayments during 2016. Still, the amount is down sharply from the €4.2 million of Bank of Ireland Mortgage Bank residential loans Mr Kennedy had in December 2010, the year he joined the group.

Bad loans

Bank of Ireland Mortgage Bank, which had an €18.5 billion loan book at the end of last year, reported a €265 million net profit last year, up from €173 million for the previous 12 months.

The result was helped as the bank’s funding costs declined and it released almost €100 million of provisions that had been previously set aside to absorb losses on bad loans. The company had freed up €35 million of such provisions in 2015.

Bank of Ireland Mortgage Bank was set up by the group in 2004 for the bank to be able to ring-fence loans that could be used as collateral under a programme of issuing asset-backed bonds. Last year, the bank issued €2 billion of asset-covered bonds.

The percentage of owner-occupier mortgage accounts more than three months in arrears at the bank fell to 2.55 per cent in December from 3.5 per cent a year earlier, while the figure for buy-to-let loans dropped to 6.7 per cent from 9.1 per cent.

The wider Bank of Ireland group, whose chief executive of eight years, Richie Boucher, is set to retire later in 2017, reported a €793 million net profit last year, down 16 per cent.