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BoI warning as home debts rise

BANK of Ireland's operating income is severely affected by rising competition in the Irish market, coupled with the cost of funding.

The bank issued a trading update this morning ahead of its AGM today.

The group said that the economic environment remains difficult with interest rates expected to remain lower for longer that expected.

But it said that arrears in its Irish residential mortgage book have continued to increase due to economic conditions and high levels of unemployment.

"The exporting sectors of the Irish economy are expected to continue to enjoy growth, underpinned by the improved competitiveness of the Irish economy," the bank said in a statement.

"Domestic economic indicators remain weak, unemployment remains elevated, and residential property prices do not appear, as yet, to have fully stabilised."

The company said that its operating costs are under strict control. It emphasised that Ireland was meeting its commitments on the EU IMF programme but said there has been some heightened concern in the markets in recent weeks about the economic performance of some other Eurozone countries.