Friday 24 February 2017

Bank of Ireland pension scheme takes Brexit hit

Michael Cogley

Michael Cogley

Photo: Getty
Photo: Getty

Bank of Ireland has said Britain's decision to leave the European Union has impacted the group's sponsored defined benefit pension schemes.

In a trading update released to shareholders this morning, BoI said the Brexit decision has resulted in the bank revising its standard defined benefit pension deficit to around €1.2bn at the end of June, a significant deviation from December, when it stood at €740m.

BOI said the outcome of the referendum has also impacted foreign exchange rates and interest rates including AA corporate bond yields, which are used to discount the liabilities in the bank's pension schemes.

"The outcome of the EU referendum in the UK has impacted, amongst other factors, foreign exchange rates and interest rates including AA Corporate Bond yields which, under IAS 19 accounting requirements, are used to discount the liabilities in the Group's sponsored defined benefit pension schemes," the bank said in a statement to the Irish Stock Exchange today.

"As a consequence, the net impact has been to increase the IAS 19 accounting standard defined benefit pension deficit to c.€1.2 billion at 30 June 2016 from €0.74 billion at December 2015."

Trading over the last six months has been in line with expectations with asset quality continuing to improve.

The bank's full interim results are due to be released on July 29.

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