Monday 11 December 2017

Bank of Ireland to pay dividend again 'later this year'

Bank of Ireland on College Green. Photo: Collins Photos
Bank of Ireland on College Green. Photo: Collins Photos
Colm Kelpie

Colm Kelpie

Bank of Ireland will wait until later in the year to announce a resumption of a dividend payment to shareholders, Goodbody Stockbrokers has predicted.

The bank is due to announce results for 2016 on Friday.

AIB and Ulster Bank are almost certain to return cash to shareholders for the 2016 period, by most measures both are well behind Bank of Ireland in terms of their recovery.

Goodbody follows Cantor Fitzgerald Ireland in forecasting that Bank of Ireland hold off on paying a dividend for 2016, and do so for the first half of 2017 instead.

Doing so would allow more time to build up capital.

"Bank of Ireland hits our target capital level of 12.5pc in the second half of 2017," said Goodbody analyst Eamonn Hughes. "So our base case remains that it will declare a dividend at the H117 results."

Last summer, the bank cast doubts on the timing of its dividend, with Brexit being partly blamed. Ceo Richie Boucher stressed the lender was still committed to a shareholder payout, but said the certainty he had earlier this year concerning the timing was not as strong.

Chairman Archie Kane had told the bank's annual meeting the previous April that the organisation remained committed to paying a dividend this year, although he suggested that this would be determined by a number of external factors, including Brexit.

Last week, Cantor FItzgerald Ireland analyst Stephen Hall said that with a relatively thin capital position and a vulnerability in its pension scheme to swings in the bond market, Bank of Ireland may delay its first dividend since the crash.

Irish Independent

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