Bank of Ireland says it is not considering a third payment break to customers whose incomes have been hit by the Covid-19 outbreak, chief executive Francesca McDonagh said on Monday.
The bank along with other lenders have agreed to allow borrowers to take a break from repaying mortgages, business loans and other facilities as temporary measure to ride out the current crisis.
The initial three month break is being extended to last six months on total.
However, a further extension is not being considered Francesca McDonagh said.
Borrowers unable to meet repayments even after the 24 week break would likely require more intensive debt solutions.
Bank of Ireland said it has yet to see a spike in bad loans as a result of the Covid 19 economic lockdown, but management have made a provision for loan impairments to rise this year.
That was a major factor in the bank reporting an underlying loss of €235m for the first three months of this year.
Towards the end of the three months to 31 March the bank experienced the initial affect of Covid-19, with adverse movements on valuations and other items of €155m and impairment charges of €266m.
Impairment charges include what is described as a management overlay of €250m, primarily reflecting the initial impact of the deteriorating economic environment – in simple terms an initial estimation of the likely hit to the bank of the crisis.
The group warned that Covid-19 would have a “material impact on 2020 results.”
As well as a risk of more bad loans it said new lending could plunge as much as 50pc – 70pc from last year, including a sharp drop in mortgage lending.
Business income is expected to be 30pc – 40pc lower due to reduced economic activity.
Francesca McDonagh, Bank of Ireland CEO, said: "We made a good start to the year - growing lending, selling more than a quarter of all new mortgages in Ireland, reducing costs, and with the lowest level of arrears of any Irish bank. However, right now everything is seen through the lens of Covid-19."
“The economic outlook for our core markets in Ireland and the UK has deteriorated, with reduced levels of activity across our businesses. The economic effects will have a material impact on the group's 2020 financial performance," Ms McDonagh said.
"The full impact remains uncertain and will be driven by the duration of Covid-19 restrictions and the successful reopening of the Irish and UK economies,” she added.
Elsewhere, customer loan volumes were €79.6bn at the end of March, an increase of €0.1bn since the end of December 2019.
The bank's net interest margin - a key barometer of a bank's profitability - was 2.07pc, three basis points lower than the last quarter of 2019, reflecting the low interest rate environment.