Bank of Ireland stocks plunge on poor lending
INVESTORS fled the Bank of Ireland yesterday as it reported an unexpectedly large fall in lending volumes over the course of 2013.
The bailed-out bank lost €525m (£432m) in 2013, an improvement on the €2.2bn it lost in 2012.
And it recorded an operating profit of €1.1bn, when excluding impairment charges, up from €224m in the previous 12-month period.
Those impairments on customer loans fell 3.4 per cent to €1.67bn, while defaulted loan volumes dipped 3.4 per cent to €17.1m.
However, the lender is on track to remain a smaller bank than in the past, with net loans and advances diving 8.8 per cent to €85bn.
Deposits also fell but by a smaller amount, down 1.3 per cent to €74bn, taking the bank’s loan to deposit ratio down from 123 per cent to 114 per cent.
Headcount at the Bank of Ireland fell 6.3 per cent to 11,255 – a fall of 761 workers over the year.
Those cuts helped bring its costs down, with staff costs down 10 per cent to €691m and overall operating costs down three per cent to €1.5bn.
At the same time group gross revenue fell 3.1 per cent to €4.4bn.
And its capital expenditure dropped 10.6 per cent to €118m.
The bank’s Basel III capital ratio came in at nine per cent.
Chief executive Richie Boucher remained upbeat on the bank’s future.
“Building on our strong franchises, we are very well positioned to pursue new business opportunities, which are increasing as the economic environment continues to improve,” he said.
“We are confident in the group’s prospects and in our ability to deliver sustainable returns for our shareholders.”
The Bank of Ireland’s shares dived over seven per cent over the day.