Bank of Ireland returns to profit and is hungry to lend, says Boucher
BANK of Ireland has become the first major bank to return to profit since the financial crash and says it is “hungry” to lend into the Irish market.
The bank said it is “normalising” its relationship with the State after returning €6bn in cash to the taxpayer to repay €4.8bn in bailout support as well as fees for its use of the bank guarantee schemes.
Bank of Ireland chief executive Richie Boucher, left, said yesterday that his bank made a loss last year but is now making a profit and generating capital.
Mr Boucher is the most senior Irish banker still in a top role at any lender here following the crash. He said he will cooperate fully with an Oireachtas banking inquiry if called to give evidence and would expect all Bank of Ireland staff to do the same.
He was speaking after financial results showed underlying losses before tax were €569m in 2013 compared to €1.5bn a year earlier.
Operating profits – not counting the impact of writedowns on historic loans – were just over €1bn.
The results reflects the findings of last year’s Central Bank “asset quality review” which found that Bank of Ireland needed to set aside more capital to cope with potential losses, chief financial officer Andrew Keating said.
Bank of Ireland had said it was contesting those findings.
The bank said it is in profit so far this year and actively lending.
“We think the economy is going to improve. We’re hungry to generate revenue, we’re hungry to lend, so we are looking forward to things with a lot more confidence, having done a lot of the very, very heavy restructuring,” Mr Boucher said.
Bank of Ireland shares fell sharply yesterday. The stock closed down 7.2pc at 36.1 cents per share.
“The fall reflects the wider drop in European banking stocks – it is not a reaction to the financial results,” according to Ian Huggard of Investec in Dublin.
He said the Bank of Ireland numbers were positive, in particular noting that its net interest margin (NIM) was lifted above 2pc in the second half of last year.
NIM is a closely watched measure of banks’ health, measuring the difference between its cost of funds and income from lending.
Mr Boucher said he would welcome a new banking force in Ireland, saying having just two big banks in AIB and his own lender is too few for the economy.