Lower interest rate will slow our recovery: Bank of Ireland
BANK of Ireland today claimed that the prospect of a prolonged period of lower interest rates will make it more difficult to recover increased costs.
In a trading update, the bank said intense competition for deposits and the high cost of the State guarantee had increased its costs.
The bank has not passed on last week's quarter-point cut in the ECB's main interest rate to its mortgage customers.
The bank said the quality of its loan book was in line with expectations, though there had been some deterioration in its Irish mortgage arrears situation in the past few months.
It said this may have been partly due to its implementation of new guidelines from the Central Bank.
The Bank said it still believed that its impairment charges had peaked, but the pace of reduction would depend on the Irish mortgage and commercial property markets.
The bank also said it had managed to increase deposits to €67bn by the end of October.
This is up from €65bn at the end of June.