A more slimline, focused Bank of Ireland is in the offing

ANALYSIS:To raise cash the bank will attempt to run down some of its non-core assets, writes LAURA SLATTERY

“I’D PREFER not to be shot myself,” said Bank of Ireland chief executive Richie Boucher, when asked what he thought of a colourful tabloid headline suggesting two ex-bankers should meet such a fate.

It was a blunt but far from smug Bank of Ireland that gave its take on the dawn of the Nama era yesterday: a world in which it is officially the “least worst” of the banks involved.

A 35 per cent haircut on its initial Nama-bound loans, compared to a 47 per cent average, directly reflects lending policies at the bank that were less reckless than those employed by its Nama peers.

“It’s not a proud boast to be the least worst,” said Boucher: just because the bank is losing relatively less money doesn’t make it much fun to be losing any money at all – a pretax loss of €1.8 billion, to be precise, in the nine months to the end of 2009.

But Bank of Ireland is still sensible to point out the daylight between it and the others. It admits to an over-leveraged balance sheet and a rate of impairments that’s nasty by normal standards. But it also points to limited exposures to single customers and an ability to give forward-looking guidance on its impairments to the all-important market watchers who will eventually decree whether or not it’s commercially wise to pump capital into the bank.

With a bad loan charge of €4 billion already declared for the nine-month period under review, the bank added that its long-term impairments estimate remains at €6.9 billion, of which €4.7 billion relates to assets that are not heading into Nama.

A more slimline, focused Bank of Ireland is in the offing: in order to raise cash, the bank will attempt to run down non-core assets such as its intermediary-driven mortgage market in the UK.

“This is far too serious for showboating,” said Boucher, when asked if the bank’s latest forecasts were a moveable feast.

Still, most variables remain fluid. Boucher’s catchphrase at yesterday’s media briefing was “ongoing basis”. It was looking at mortgage rates “on an ongoing basis” (but they’re going up, he later admitted); employee numbers, too, would be assessed in an ongoing fashion (but costs must come down).

Boucher estimates that the bank has 300-400 employees and contractors handling the “ongoing process” of Nama, towards which he felt somewhat resigned. “It is what it is . . . I think there is no point in railing against the wall or whingeing, you just have to deal with what it is and move on.”