Saturday 14 December 2019

Bank of Ireland set to pay first dividend since 2008 next year

Bank of Ireland boss Richie Boucher. Bank of Ireland Photo: Steve Humphreys
Bank of Ireland boss Richie Boucher. Bank of Ireland Photo: Steve Humphreys

Michael Cogley

Bank of Ireland (BoI) is on course to pay its first dividend since 2008 next year, according to the firm's chief executive, Richie Boucher.

The bank's chief executive said that dividend payments would be re-installed next year based on the bank's 2016 profits.

Mr Boucher also ruled out plans to raise capital and said that there has been a continued reduction of those in arrears.

"This was always in accordance with our own plans, one of the things that we did in the first week of this year was we repaid the preference shares, which had previously been owned by the Government," he told RTE's Morning Ireland.

"We have used some of our capital to do that, our businesses are performing well, we are generating profits, so we anticipate if that scenario continues then we will be in a position to start paying dividends next year based on the 2016 profits," Mr Boucher said.

The bank reports this morning that all its trading divisions were profitable last year and that group loans grew substantially.

According to its preliminary results for 2015, BoI now has €3.9bn of net new lending at the core of its loan books.

Speaking about the results Mr Boucher said the bank was well positioned to meet credit demand.

"With our strong franchises, we are well positioned to meet credit demand which is recovering as the Irish economy grows and confidence returns. We generated an underlying profit before tax of €1.2bn in 2015, 30pc higher than the equivalent figure in 2014 of €921m," Mr Boucher said.

BoI says that it reduced non-performing loans last year by a further €3.8bn and that it has maintained progress towards dividend capacity.

The bank now has €85m of customer loans on its balance sheet while customer deposits account for around 90pc of group funding.

Mr Boucher went on to say that he was optimistic about the bank's growing potential to deliver a dividend.

"We have maintained our progress towards dividends and have updated our distribution policy.  The strength and momentum in our businesses gives us confidence in the group’s prospects and in our ability to continue to focus on our duty to responsibly develop our profitable, long term businesses and better serve our customers, in a way that delivers attractive sustainable returns to our shareholders.”

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