Bank of Ireland says its four-year crisis is over
Lender says it is a ‘normal’ bank once more as it reports pretax losses of €504m
Bank of Ireland said impairment charges and losses fell in the first half of 2013. Photograph: Simon Dawson/Bloomberg
Bank of Ireland this morning declared itself a “normal” bank once again after four difficult years.
Richie Boucher, the bank’s chief executive, said it was close to weaning itself off crisis-era liquidity funding from the European Central Bank. “A lot of the heavy lifting is now complete,” he said of the bank’s restructuring. “Funding provided by the ECB is quickly approaching normalised levels.”
He said the 15 per cent State-owned lender was firmly on the mend as it more than halved its pretax losses and charges for bad loans fell in the first six months of the year.
“It’s been a hard four years,” Mr Boucher said. “But we now have a normalised bank which has strong momentum towards profitability... We are in the more pleasant place of having the challenges of ordinary businessmen and women.”
He said that the bank was due to attend talks with unon representatives at the Labour Relations Commisson next week over the €1.2 billion deficit in the bank’s pension scheme.
Analysts at Davy stockbrokers are now predicting that the bank could return to profitability in 2014, if it maintains the trajectory outlined in today’s relatively positive numbers.
According to its interim report, operating profit before impairment charges also rose, with the bank cutting its day to day expenses.
Pretax losses for the first half were €504 million, less than half of the €1.2 billon the bank incurred in the same period of 2012. Underlying losses were €383 million for the six month period, compared with €933 million a year earlier.
Operating profit before charges for bad debts were taken into account rose to €380 millon, from €37 million a year earlier.
Its net interest margin also rose significantly, gaining 31 basis points to 1.65 per cent. The bank has set itself a target of 2 per cent.
The bank reduced its impairment charges across most of its categories, with only its consumer sector seeing a slight rise.
Additional reporting: Reuters