Friday 21 July 2017

Ulster Bank profits fall while Bank of Ireland says no dividend until next year

Ulster Bank head offices on George’s Quay, Dublin
Ulster Bank head offices on George’s Quay, Dublin

Sean Duffy

Ulster Bank’s operating profit in Ireland fell by €338m last year as a result of costs paid to thousands of its customers affected by the tracker mortgage scandal.

The bank posted a profit of just €24m for last year due to an increase in litigation costs of €229m. The bank also suffered a €56m loss as a result of impairment costs.

Ulster bank said the costs “reflect a provision for remediation and programme costs associated with an industry wide examination of tracker mortgages.”

The bank’s adjusted operating profit fell by 23pc compared to 2015 as a result of the costs.

" We have reported good progress on our work on the Tracker Mortgage Examination as 1,885 customer accounts have been restored to a tracker rate. As previously indicated, we do expect to identify more impacted customers and we are working through this process with the Central Bank as a matter of urgency," Ulster Bank ceo Gerry Mallon said.

"We recognise that these are complex matters and that speed of resolution should not be at the expense of fairness or accuracy," he added.

Meanwhile, Bank of Ireland has announced that it will not pay shareholders a dividend until 2018.

The bank said it had taken the decision to award dividend payments to shareholder in after the end of the 2017 financial year.

The bank announced underlying profit of €1,071m for 2016 and said it has increased the size of its core loan book by €1.7bn.

New lending rose to €13bn, while the bank said it had reduced its c non-performing  loans by 40pc compared to 2015.

"Our business is performing in line with the strategic objectives we have set ourselves. All trading divisions are profitable and have contributed to our strong financial performance during the period,” said Bank of Ireland ceo Richie Boucher.

Mr Boucher said political uncertainty0-nakmely Brexit could have an impact on the business in the coming years.

“Political events, in particular the UK's decision to leave the European Union, may impact on our customers and our business growth in the coming years,” Mr Boucher continued.

“Nevertheless, we remain confident that the substantial progress the Group has made in recent years,” he added.

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