Bank of Ireland sees losses surge

BANK of Ireland (BoI) yesterday distanced itself from its fellow state-supported Irish banks by reiterating its commitment to regaining financial independence, despite admitting that underlying pre-tax losses doubled over the first half of the year.

BoI, which is 36 per cent owned by the Irish government, posted a core pre-tax loss of €1.25bn (£1bn) for the six months to end of June, compared to a loss of €0.67bn last year.

But chief executive Richie Boucher was adamant the group remains committed to extricating itself in a “safe and prudent” manner from state support. The pledge come in stark contrast to its peers, after fully-nationalised Anglo Irish Bank on Tuesday won EU approval for a fresh bailout of up to €10bn from the Irish government.

Boucher said Bank of Ireland’s recent €2.9bn independent capital raising exercise was a “critical step” in the process, demonstrating it has the support of investors.

“We continue to build on this through our focus on gathering customer deposits and extending the maturity profile of our wholesale funding,” Boucher added.

Bank of Ireland, which last month passed Europe’s stress tests with an adverse scenario tier one capital ratio of 7.1 per cent, comfortably over the six per cent EU threshold, warned yesterday that loan impairment charges had remained high as the Irish economy continues to stutter. Excluding the pool of toxic loans which it has earmarked for sale to Ireland’s “bad bank”, the National Asset Management Agency (NAMA), impairment charges on loans and advances to customers fell over the first half to €893m, just 3.6 per cent below where they stood this time last year.