Bank of Ireland warned today half-year earnings would be less than previously forecast due to the impact of falling stock markets on its pension and life assurance business.
In its final trading update before its closed reporting period, the bank said: "The severe downturn in equity markets has had a material impact on embedded values in the life and pensions business and, in the absence of a dramatic recovery, will adversely affect group profits for the half year".
The bank said although not immune to the consequences of the terrorist attacks on the US, its loan book had limited exposure to sectors such as airlines and insurance that have been most affected by the attacks.
"The indirect consequences for Irish economy exposures are manageable in the context of the present satisfactory asset quality profile of the loan book," the bank said.
In its Irish retail business, the bank said despite the slowdown in the Irish economy this year retail banking will report "very satisfactory" profit growth.
Lending and credit balances volumes are expected to show increases of 16 per cent and 19 per cent, respectively, with deposit volume growth about 12 per cent.
But the group said net interest margin at group level will be lower compared to the same period last year, reflecting lower interest rates.