Bank of Ireland reports profit of €399m, says all public servants have now been paid
BANK of Ireland today reported a strong set of results including a pre-tax profit of €399m for the first half of the year, compared with a loss of over €500m in the same period last year.
The ban, which avoided nationalisation following the financial crisis, added that thousands of public sector workers, as well as pensioners, who didn't receive payments to their accounts yesterday have now been paid but admitted there may be some delays with processing payments.
Chief executive Richie Bourcher reiterated today that the glitch was unacceptable.
"What happened yesterday should’t have happened, It was an isolated case but it shouldn’t have happened," he said.
“The bank has made heavy investment in IT infrastructure, our systems are robust,” he said.
“We are investing heavily and we need to, that is a component of out cost base,” he said.
The bank does not yet know how many people were affected by the IT glitch that meant many Gardai, nurses and other mainly public sector workers and pensioners were paid late.
The bank added that it has promised to waive fees and charges run up by anyone affected by the payments blunder.
Bank of Ireland said today that impairment charges on loans and advances to customers was reduced to €444m in the six months, down from €780m in the same period last year,. while default loan volumes also fell to €16.7bn, compared with €17.1bn at the end of December.
In addition, impairment charges have fallen by more than 40pc.
"That’s rights across the books," Mr Boucher said today.
"Charges against mortgages, SME charges, investment property are all down."
"We have about 20,000 restructures in place for customers, that’s up on last year."
He added that if tracker mortgages are taken out of the equation the loan book is actually up.
The bank's net interest margin - a measure of profitability - also rose slightly to 2.05pc.
Bank of Ireland also reiterated that it has no need for additional capital ahead of upcoming European stress tests.
Finance Minister Michael Noonan said that the recovery in the Irish economy is taking hold and further proof of this is evident in the Bank of Ireland half year results.
"The results show that the Bank is lending into the real economy, reaching sustainable solutions with SME and mortgage customers in arrears, and making a profit," he said.
"The investment in Bank of Ireland shows that the State can make a profitable return on investments in the banks.
"The State invested €4.8 billion in Bank of Ireland in 2009. To date, about €6bn has been returned to the State through sales of investments, interest coupons and guarantee fees.
In addition, the State retains a 14pc shareholding in Bank of Ireland that is currently valued at c€1.2bn.”
Its return to profit comes just days after Allied Irish Banks.