Weak Sterling impacts Bank of Ireland's profits
Published 29/10/2016 | 02:30
The fall in the pound impacts Bank of Ireland's Sterling profits, but activity in the UK has remained "resilient" despite the Brexit vote, the lender said.
In a trading update, the bank said that business income overall is in line with the first half of this year, and it has maintained a tight control over costs.
"Economic activity in Ireland has continued to expand while in the UK, where our businesses are primarily focused on the domestic consumer sector, economic activity has thus far remained resilient post the result of the UK's EU referendum," the bank said.
"Sterling weakness vis-à-vis the euro impacts the group's reported balance sheet assets and liabilities as well as the euro equivalent of our Sterling profits."
About a quarter of Bank of Ireland's total income comes from the UK, along with about 44pc of its outstanding loans.
The bank said new lending volumes overall were at €10bn for the first nine months of the year, fractionally up on the €9bn recorded during the same period in 2015.
But loan volumes were dented by the weaker pound, falling by €1.3bn to €78bn by the end of September.
But its core loan book, which excludes non-performing debt, Irish tracker mortgages, continued to grow during the three months to the end of September.
The bank said customer deposits were at about €75bn.
Meanwhile, ratings giant Standard & Poor's warned that Brexit presents a significant risk to the UK's track record of strong economic performance, and to its large financial sector in particular.
"The negative outlook reflects our opinion that the recent decision to exit the European Union poses a potential risk to the UK's national income, as well as its fiscal and external balances," the ratings agency said.