Bank of Ireland profits fall on lending fees amid ‘economic uncertainty’ – The Irish Times

Bank of Ireland’s net profit fell 18% in the first half of the year, standing out among the three remaining banks in the market by taking a loan impairment charge in the period amid growing concerns about the economic outlook.

The bank has set aside 47 million euros to deal with possible loan losses at a time “of economic uncertainty, mainly due to Russia’s invasion of Ukraine, inflationary pressures and expectations when it comes to interest rates,” she said on Wednesday.

This was the main contributor to the drop in net profit to 279 million euros compared to 341 million euros for the same period last year. The decline was also fueled by an additional charge of 33 million euros taken to cover the estimated cost of drawing a line as part of the bank’s role in the tracker mortgage scandal, as well as acquisition costs.

Meanwhile, Bank of Ireland has said its search for a new chief executive is ‘well advanced’ as Francesca McDonagh prepares to leave in September, after five years, to join Credit Suisse in a senior role. .

The lender has confirmed that it plans to appoint an interim CEO to bridge the gap between Ms McDonagh’s departure and a permanent CEO taking on the role. The Irish Times reported in June that Gavin Kelly, head of the group’s Irish retail banking unit, is expected to fill the interim post.

Customer loan volumes decreased by EUR 1.7 billion to EUR 74.6 billion in the first six months of the year. However, excluding currency fluctuations and a planned reduction in the size of the UK loan portfolio to exit low value mortgages, loans increased by €1bn over the period.

The group’s new lending of €7.7bn, driven by a 25% increase in Irish retail lending across its mortgage, corporate banking and consumer portfolios, as well as a 12% increase corporate and market loans, were more than offset by 8.7 billion euros. credit redemptions. UK retail lending fell 19%. Customer deposits increased by €1.3 billion to €94.1 billion.

As for the outlook, the bank said it was on track “in the near term” to deliver a sustainable return on tangible shareholders’ equity of 10%, which is what analysts consider the sign of a healthy bank.

This situation is fueled by rising interest rates, the recent acquisition of the brokerage and wealth management company Davy as well as the planned purchase of 9 billion euros of performing loans from KBC Bank Ireland, which will withdraw from the market.

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