B of I counts the cost of euro

The advent of the euro will cost Bank of Ireland an estimated £25 million a year in profits from foreign exchange earnings by 2002, presuming sterling stays outside the single currency. The bank's group chief executive, Mr Maurice Keane, said yesterday that earnings from foreign exchange income would begin to drop suddenly from January 1st, 1999. He was speaking following the bank's annual general court which was attended by more than 300 shareholders.

Mr Keane said the bank had been developing a number of lines of business which would compensate for the loss of earnings from foreign exchange. These included the fund management business, where the amount of funds under its control had increased by just under 80 per cent during the past year, and the Bank of Ireland International Finance operation in the International Financial Services Centre. Mr Keane said there was no question of the bank "jacking up fees to compensate" for the loss of earnings.

On acquisitions, Mr Keane said the bank was very happy with the performance of Bristol & West and would be happy to expand its business in Britain organically. However, if something good did come along at the right price, the bank would consider an acquisition. He said Britain was the most logical place for expansion but the bank had not turned its back on the United States.

Asked about the issue of bogus non-resident accounts, Mr Keane said he believed the bank's affairs in this regard were in good shape. The governor, Mr Howard Kilroy, told shareholders there was an encouraging momentum to the bank's business in the current year. This gave cause for continued optimism regarding the immediate and medium term. Mr Kilroy said the euro would be good for Ireland and therefore good for the bank's business in the longer term.