Barclays Bank Ireland hit by low interest rates but promises expansion
Dividend of €75m paid to British parent company last year despite €32.6m drop in revenue
Barclays Bank Ireland paid a dividend to its British parent company last year of €75 million, despite a 16 per cent drop in revenues to €32.6 million.
Barclays, which engages in corporate wholesale banking and wealth management in Ireland but has no branch network, blamed the dip in its interest income on the low interest rate environment, as the European Central Bank keeps rates at historic lows to fend off deflation in the euro zone.
Interest income fell by 29 per cent and there was a 21 per cent rise in the bank’s operating costs, according to recently filed accounts. But the overall effect on its performance was defrayed by a 10 per cent rise in commissions and a €12.7 million gain from closing off its defined-benefit pension scheme.
Pension gainThe bank made a net profit following the pension gain of €25.7 million, more than double its 2012 profits. In an agreement with the Pensions Board to plug the deficit in the scheme, the company said it agreed last September to pump €15 million into it over the next 10 years.
The bank said customer deposits rose by 18 per cent last year to €1.15 billion, while its loan book rose 3 per cent to €634 million. With its solvency ratios comfortably above mandatory levels, it said it has “significant capacity to conservatively expand the balance sheet”, through lending.
“During 2013, Barclays Bank Ireland continued to invest in its business in Ireland and in expanding its team,” said a spokesman for the bank.
“The results for the period reflect this additional investment, along with the continued downward pressure on net interest income . . .
“The bank’s strong capital position means it has significant capacity to support its future business growth in Ireland on the back of an enhanced offering.”