Interest rate expectations and Brexit presenting 'challenges' for Bank of Ireland
A "material" lowering in interest rate expectations and Brexit uncertainty are presenting Bank of Ireland with "challenges" to generate the income and loan growth that it set out at its investor day last year.
"In response, management is focused on a range of actions to mitigate these effects," Francesca McDonagh, Bank of Ireland CEO, said.
"Notwithstanding these challenges, the economic fundamentals underpinning our strategic ambition remain supportive," Ms McDonagh added.
She was commenting as part of the bank's interim results for the six months to 30 June, where the bank reported underlying profit of €376m. This is down from €500m in the same period last year.
During the six months the bank recorded a non-core charge of €61m. This includes €55m in costs to compensate customers impacted by the tracker mortgage scandal and "other restructuring charges mainly relating to redundancy and property."
The bank’s net interest margin - the difference between what a bank earns and what it charges savers was 2.16pc, down from 2.23pc in the same period last year.
The bank said it was the biggest lender into the Irish economy in the first half of the year, with net lending growing by €1.2bn and new lending of €7.7bn.
It reported €1bn of new residential mortgage lending in Ireland, where it currently has a 23pc share of the mortgage market, down from 28pc in the corresponding six months of 2018.
Meanwhile, it increased its share of lending to small and medium businesses.