BoI says earnings in line with forecasts despite Brexit impact

Bank of Ireland saw a rise in net lending in the first nine months of the year as the number of non-performing loans it has continued to decline.

The bank said in a trading update on Wednesday that net interest income and business income for the nine months to the end of September were in line with expectations.

Bank of Ireland said economic growth in its core markets of Ireland and the UK remained positive despite the uncertainties related to the UK's impending EU divorce.

It said customer loan volumes were €78 billion, an increase of €1 billion since the end of December 2018.

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Net lending growth of €1.5 billion was partially offset by NPE (non-performing exposures) securitisation and sale transactions and the disposal of the group’s UK credit card portfolio, it said.

New lending in the first nine months of 2019 was 4 per cent higher than in the same period a year earlier.

The bank said its market share of new mortgage lending in Ireland averaged 23 per cent “ with strong positive momentum in market share of mortgage applications during the quarter”.

It said while SME lending demand was still positive it had been impacted by Brexit uncertainty.

Reduced

NPEs have reduced by €400 million since the end of June 2019 to €3.8 billion at the end of September 2019, equivalent to an NPE ratio of 4.7 per cent, it said.

“The group continues to progress a full range of resolution strategies in response to the associated and evolving regulatory framework,” the bank said.

Customer deposits stood at €81.8 billion, it added.

In a note to investors, Davy said the bank was continuing to demonstrate progress in meeting it strategic targets, with operating expenses declining by 2 per cent and a net interest margin of 2.13 per cent.

“While mortgage share has remained at 23 per cent in the eight months to end August, strong momentum in approvals is reported, which should result in an increased share going into 2020,” it said.

“Capital growth positions Bank of Ireland well for the upcoming known regulatory headwinds,” Davy added.