Video: Bank of Ireland ‘profitable and generating capital’

Bank says customer deposits were appromximately €74 billion at March-end

Ciarán Hancock goes through the highlights from Bank of Irelands AGM, held in UCD.

Fri, Apr 25, 2014, 16:25

Bank of Ireland is profitable and has been generating capital this year, its chairman Archie Kane told shareholders at its annual general meeting in Dublin today.

Mr Kane said the bank is receiving more than 1,000 mortgage applications a month and is providing more than one-in-three of all new home loans in Ireland in terms of drawdowns.

It is also receiving a similar number of applications per month for credit from SMEs, with 85 per cent of them being approved. The bank said it is providing more than half of all new non-property loans to Irish small businesses.

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Mr Kane said the bank has upgraded 70 of its branches in Ireland with further upgrades and some new locations planned for this year. It is also “testing a new current account proposition with customers” in its joint venture with the UK Post Office.

Mr Kane said the bank’s capital is being “prioritised towards the planned de-recognition” of the remaining €1.3 billion in preference shares that are held by private investors and are due to mature in 2016.

“After that, our ambition will be to progress to create the capacity whereby we can contemplate future dividends,” Mr Kane added.

The Bank of Ireland chairman said its “impairment charges trajectory” was “moving in the right direction”.

In Northern Ireland, the business is performing in line with expectations and its motor finance business is “deepening its relationship” with customers and has delivered a “strong financial performance”.

A smaller crowd than recent years has turned out for the AGM in UCD’s O’Reilly Hall. All of Bank of Ireland’s directors have attended the meeting, with the exception of former Fianna Fail Government minister Joe Walsh, who is recovering from illness.

In an interim management statement this morning, the bank said it was achieving higher margins on new lending and actively seeking new lending opportunities.

“The macroeconomic environment and outlook in Ireland and the UK, which are our key markets, are continuing to improve in 2014,” it said.

The group’s loan volumes were approximately €83 billion at the end of March, compared to €84.5 billion at end-December 2013, as repayments continued to exceed new lending.

Customer deposits were circa €74 billion at the end of March, giving rise to a loan to deposit ratio of 112 per cent.

In February, Nama announced it would pay a coupon on its subordinated debt. As a consequence, the Bank of Ireland says it has increased the carrying value of its Nama subordinated debt to 70 per cent of its nominal value, which reverses part of the impairment charges taken in previous years on this asset.