Bank of Ireland: Outlook in Ireland improving amid muted lending
BANK of Ireland said today that the economic environment and outlook in Ireland has improved and the bank is generating profit and capital since the start of the year.
The bank issued a trading statement today ahead of its annual general meeting.
Its net interest margin - a measure of the profitability of its lending - inched up to 2.05pc in the first three months of the year from 2.03pc in the second half of 2013 after substantial rises over the last 18 months.
In addition, the group’s loan volumes were about €83.3bn at the end of March 2014 compared to €84.5bn at 31 December 2013, as repayments continued to exceed new lending.
“Fees and other income are broadly similar to the levels earned in the second half of 2013,” the bank said.
“The Group remains focused on tight cost control.
“We continue to consolidate, standardise and simplify our operations whilst investing in our people, businesses and infrastructure.”
The bank added that as anticipated, defaulted loan volumes are continuing to decline, with Group defaulted volumes at the end of March 2014 being below the levels at 31 December 2013.
“Total arrears in our Irish mortgage book have continued to fall in the first quarter of 2014, with reductions in both early and default arrears,” it said.
Bank of Ireland also said that following the NAMA announcement that it would for the first time, pay a coupon on its subordinated debt, the bank has increased the carrying value of its NAMA subordinated debt to about 70pc of its nominal value, which reverses part of the impairment charges taken in previous years on this asset.
“In Ireland, we continue to identify and convert new lending opportunities as the economy recovers and as the banking market consolidates,” the bank said.
(Additional reporting Reuters)