Sunday 25 August 2019

Bank of Ireland to boost dividend as Chairman questioned about branch closures and staff cuts

Bank of Ireland chairman Patrick Kennedy. Photo: Gary O' Neill
Bank of Ireland chairman Patrick Kennedy. Photo: Gary O' Neill

David Chance

Bank of Ireland plans to increase its dividend to half of “sustainable” profits over time after it paid out its first dividend since the financial crisis on its 2018 earnings.

Chairman Patrick Kennedy faced repeated questions over branch closures and cuts to staff at its annual meeting at the RDS, many from former employees, even as he sought to keep the focus on the bank’s plans to boost retained earnings.

The bank said that it believed net interest margins, which have shrunk this year to around 2.16pc due to the impact of its UK credit card division which it has put up for sale, would recover back into the “2.20s around the next couple of years”, according to Chief Financial Officer Andrew Keating.

But appeared to be the branch cuts that most occupied the minds of shareholders, many of whom were bank pensioners and who posed questions to the board.

It was also criticised by one shareholder who criticised the low levels of shareholdings of the board, saying they didn’t “show skin in the game”.

Brian Hanratty, a former employee living in Dundalk was typical of those who criticised the branch closures saying that where there had once been two branches with a combined staff of 35, in “the one remaining branch, there are four”.

The bank said it remained committed to reducing costs and cutting is bad loans after it sold €375m in buy-to-let mortgages last month, a move that cut its non-performing loans ratio to 5.8pc, the lowest level among retail banks here.

Mr Kennedy told the meeting, held at the RDS, that the bank aimed to cut that ratio to 5pc, a level targeted by European regulators.

He said the economic outlook was relatively benign, with strong growth in Ireland, and that the bank was better prepared to manage risks.

Online Editors

Also in Business