Business Irish

Saturday 10 December 2016

We're keen to lend to viable clients only, says Boucher

Published 21/02/2012 | 05:00

Bank of Ireland chief executive Richie Boucher
Bank of Ireland chief executive Richie Boucher

BANK of Ireland chief Richie Boucher yesterday insisted his bank was "very keen" to lend money to businesses but "clearly" could not lend to its customers whose companies were "not viable".

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The BoI boss also refused to rule out further job losses across his 13,700-strong workforce and admitted he'd have "preferred to have made more progress" on cuts that have already been announced.

Criticism

The comments came as Mr Boucher faced down criticism about his own record at the rescued bank, telling reporters that while "clearly you regret mistakes and misjudgments . . . what I have to do is focus on the job I have today".

Mr Boucher's position at BoI is being reviewed as part of the Central Bank's investigation into whether bankers who held directorships before their institutions were rescued are "fit and proper" to continue in their roles.

Asked if there were contingency plans" for what would happen if he fails that review, Mr Boucher said he was "not going to make any more comments on the subject" of his own position.

He was speaking to reporters as BoI announced an underlying pre-tax loss of €1.5bn for last year, as loan impairments of almost €2bn more than wiped out below-expectation operating profits of €411m.

Mr Boucher also said:

• "The bank sees "huge potential" to grow to Ireland's number one business bank, but won't lend to customers "who we don't think are viable".

• "BoI will continue to pursue its 'loan to deposit' targets even if the Government succeeds in its bid to have the targets lifted.

• "The bank is "unlikely" to test the unsecured funding markets until the Irish Government begins issuing new debt."

BoI has already cut 400 staff as part of a programme to eliminate 750 positions. The terms of the remaining 350 cuts are the subject of negotiations with the Department of Finance, which holds a 15pc stake in the bank and guarantees its debt and deposits.

Mr Boucher wouldn't be drawn on whether the bank was being pressured to offer its staff the 'three weeks per year of service' redundancy package that the State is pushing for at AIB, but said that any BoI offer needed to be "financially sensible for the bank" and attractive enough to get the numbers BoI needs.

Asked if negotiations with the Department of Finance had delayed cuts, he replied: "We would have preferred to have made more progress than we have to date.

"We also recognise that the Department of Finance is looking at issues unrelated to BoI in the banks that it owns."

Lending

On the lending front, BoI's figures showed net lending remained almost static in 2011 as repayments roughly equalled new loans.

The Department of Finance wants to stimulate lending by removing absolute targets requiring banks to have no more than €122 on loan for every €100 on deposit by 2013.

Mr Boucher yesterday said that while "less compulsion is good", the so-called 'loan to deposit' targets were also "the bank's internal target" and would still be pursued.

He insisted the bank was open to lending to "good businesses" and saw "a massive opportunity" to capitalise on its position as "better organised" than its peers.

Irish Independent

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