Bank of Ireland’s UK subsidiary reports 70% fall in underlying profit
Business hit by pandemic offered 70,000 loan payment breaks
Bank of Ireland: UK subsidiary has a customer base of 2.5 million.
Bank of Ireland’s UK subsidiary saw its underlying profit fall by 70 per cent to £50 million (€58 million) last year as the pandemic weighed heavily on activity.
Bank of Ireland employs about 1,800 staff in the UK and has a customer base there of 2.5 million.
The outcome of a strategic review of its Northern Ireland operation responded to increased customer demand for digital banking and a “smaller, modernised branch network”, it said.
The lender is to close more than 100 branches in Ireland – 88 in the Republic, 15 in Northern Ireland – as part of the major restructuring. However, it has signed a deal to allow personal and business customers use their local An Post office for certain services, including cash withdrawals.
Bank of Ireland UK said its new gross lending amounted to £4.8 billion, down from £5.9 billion in 2019, “reflecting focus on higher-margin products whilst maintaining lending quality”.
New residential mortgages originated came to £3.1 billion for 2020, down from £3.6 billion.
The subsidiary said it supported customers during the Covid-19 pandemic via 70,000 payment breaks while providing £295 million UK government-backed loans.
Bank of Ireland UK has a long-standing partnership with road-assistance and insurance firm AA, which brings financial products to nearly three million AA members in the UK. This was recently extended until 2028.
Bank of Ireland UK chief executive Ian McLaughlin said 2020 had been “an extraordinary year” for the business.
“We held our focus on improving the customer experience we provide, supported our customers through Covid-19 and Brexit and enhanced our relationships with our key brokers and partners,” he said.
The full review of the UK operation has been completed and the bank has now embarked on a multi-year restructuring programme, Mr McLaughlin said.
“We are making good progress by taking the actions necessary to improve our return on capital by growing our lending in selected products, leveraging our areas of expertise and will continue to drive efficiencies through digital and operational improvements,” he said.
“Although the UK market remains highly competitive and challenging, we have a clear strategy for dealing with these challenges, and will execute our strategy with determination and pace,” Mr McLaughlin said.