B of I puts in a strong performance

Bank of Ireland has signalled a strong performance at its Irish and UK operations last year

Bank of Ireland has signalled a strong performance at its Irish and UK operations last year. It stressed it was comfortably positioned in its €156 million general provision to absorb losses that may arise from foot-and-mouth disease.

In a trading statement issued to the Irish Stock Exchange yesterday, the bank said strong growth in business, stable profit margins and tight cost controls would deliver good profit growth at the Republic's second-biggest bank. Bank of Ireland shares rose in Dublin yesterday on the back of the positive statement. The shares gained 35 cents to close at €8.60.

Lending to customers in the Irish market, which accounts for 60 per cent of the group's profits, has risen by more than 20 per cent. The amount of money held in customer credit accounts was up by 20 per cent. Deposits also grew, increasing by 15 per cent and enhancing the bank's funding resources by 16 per cent.

Profit margins on lending and deposits were stable, with net fee income from this source expected to show an increase of more than 15 per cent. Other income rose by less than 10 per cent after adjusting for the transfer of a portion of the credit card business to the EuroConex joint venture. Costs are expected to be 5-10 per cent.

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The bank is satisfied the quality of its assets is good with charges for loan losses expected to be very low for the 12-month period.

Group life assurance sales continued to benefit from strong economic growth with annual premium sales up 32 per cent.

Corporate and treasury operations put in a strong performance. Growth in lending in this division was around 30 per cent with trading gains also boosting the profitability of treasury's business.

The bank's asset and wealth management services were hit by volatility in the stock markets. Total assets under management at Bank of Ireland Asset Management were lower. Private banking and its security services business performed well.

In the UK, subsidiary Bristol & West was hit by lower profit margins. But Bristol & West's recent acquisitions, Chase de Vere, is performing ahead of expectations.