Bank of Ireland boss not worried about Brexit impact on its UK units

Ahead of Irish election, Boucher says working relationship with Michael Noonan is “professional”

Andrew Keating chief finance officer and Richie Boucher, chief executive announcing Bank of Ireland prelim results. Photograph: Cyril Byrne/THE IRISH TIMES

Andrew Keating chief finance officer and Richie Boucher, chief executive announcing Bank of Ireland prelim results. Photograph: Cyril Byrne/THE IRISH TIMES

 

Bank of Ireland will not express an opinion on how people should vote in the June referendum on the UK’s membership of the European Union, its chief executive Richie Boucher has said.

Speaking to media following the publication of its annual results, Mr Boucher said: “That’s a decision for the British people. We have a policy of not commenting on political matters or advising people how they should vote in the democratic process. Everyone must make up their own mind.”

Bank of Ireland made about 16 per cent of its profit in the UK last year and has 3 million customers there through consumer banking franchises. At the end of December, it held just more than €9 billion in UK government bonds, cash balances at central banks and other assets. It also employs just under 1,700 staff there.

Mr Boucher is sanguine about likely impacts on the group should British voters decide to leave the EU.

“Our Northern Ireland business is not a big business [in terms of the group] and is self funded anyway. In GB, it’s about working with partners [the Post Office and the AA]. We utilise their infrastructure. Their branch networks, their membership and their brandings so we don’t have a big financial investment up front. We think our business model is quite resilient.”

Mr Boucher also noted how the bank’s UK operations are “sterling capitalised and sterling funded” and that the business is a separate subsidiary with a local banking licence that is regulated in the UK.

In terms of potential Brexit issues, Mr Boucher said: “Britain is one of the few countries in Europe where its population is growing. It’s a big internationally traded economy.We then look at the average tariff of countries not in the EU and trading with the EU. That seems to be manageable.”

Bank of Ireland’s retail UK division made a pre-tax profit of €193 million last year, a rise of 37 per cent on 2014. Its loan book there was unchanged at £26 billion while customer deposits rose last year by 7 per cent to £21.6 billion.

Mr Boucher also said it would be “inappropriate” to comment on the upcoming general election in Ireland.

But he did offer some insight into the bank’s relationship with the Minister for Finance Michael Noonan.

“The minister has challenged us but generally speaking we have a working, professional relationship,” he said. “The goals of the bank have been very much the goals of the Government. We’re the largest lender into the economy and that’s obviously positive.

“The minister made the decision to retain a chosen shareholding in the bank [when it was recaptalised with external investment in 2011]. The share price is up at least 250 per cent from that time. We’re investing in the economy so we’re aligned in our goals. There are obviously areas of some difference but that’s the normal part of the process.”

Bank of Ireland remains 14 per cent owned by the State and has repaid all of its €4.7 billion in bailout funds.