Bank of Ireland: New bank levy will cost €40m a year
BANK of Ireland said a levy introduced as part of Budget 2014 will cost the bank €40m a year. But the bank said it is able, and willing, to lend.
The new tax on banks aims to raise €150m a year in 20144, 2015 and 2016, and is being levied on all the main banks based on the size of their deposits.
Bank of Ireland’s estimate for the cost of the levy means it expects to be hit with more than a quarter of the total charged. It is contained in an interim management statement (IMS) issued today.
Bank of Ireland’s share price has increased at the fastest pace of any lender in Europe this year. In its IMS it said it is rebuilding profitability. The bank said its net interest margin, the difference between what it pays savers for deposits and charges borrowers for loans, is now in excess of 1.9pc.
It is good news for the bank, but a sign that both savers and borrowers face a tougher environment.
The recovery in margins does mean new lending is a more attractive prospect for the bank, now.
“We are actively seeking new lending opportunities of the appropriate credit quality and at appropriate levels of return,” the statement said.