Bank of Ireland trading as expected as non-performing loans dip by €900m
Bank of Ireland has said it is trading in line with expectations in the first three months of the year as it benefited from an expanding export sector and increased consumer spending.
In a trading update this morning the bank also said it reduced the volume of non-performing loans by €900m since the end of 2015.
An improving labour market was amongst the conditions the bank cited for increased spending.
In the UK Bank of Ireland said that despite its regulatory capital ratios being substantially hedged from currency translation impacts, a 7pc dip in the value of the sterling has hit both its balance sheet assets and its profit and loss account.
On a constant currency basis the bank's net interest income has performed in line with expectations.
"Liquid asset spreads reflected the ongoing very low interest rate environment and bond sales that were completed in the early part of the year, with related additional gains benefiting non-interest income.
"As a consequence of these factors, our net interest margin averaged 2.11% during the period," Bank of Ireland said in a statement.
The volume of non-performing loans fell to €11.1bn at the end of March while defaulted loans dipped by €800m to €9.8bn.
The fall in the value of the sterling caused customer loan volumes to dip €81bn and customer deposits to fall to €79bn.
Davy analyst Diarmaid Sheridan said: "As expected, customer loans were impacted by around 3.5pc from sterling depreciating in the quarter, while underlying customer loans reduced by around €700m."