BoI records 13% rise in profits
Bank of Ireland has recorded pre-tax profits of €1.32bn for the past financial year – a 13% increase on the previous 12 months.
The bank said that strong economic performance in its main Irish and UK markets gave it optimism for the coming year.
“I’m very pleased with the results, our underlying profit before tax is up 10%,” Brian Goggin, chief executive of the bank, said.
“Our dividend is up 10%, for the twelfth consecutive year we have generated a return in equity in excess of 20%.”
The bank’s preliminary results for the year to March 31 last found earnings per share were up by 7%.
It recently announced a major transformation programme which will include reducing the workforce by 2,100.
The programme will cost €210m and involve a capital expenditure of €40m. The bank provided for €117m in the results to March – and stated the initiative would result in an annual reduction in costs of €120m over the next four years.
Mr Goggin said the bank was in discussions with workers and the Labour Relations Commission had said they believed a satisfactory conclusion could be reached by the end of this month.
“Our objective here is to achieve these reductions through voluntary means, through redeployment and compulsory redundancies as a last resort,” he said. “I’d hope we can achieve it without compulsory redundancies but I just can’t rule it out.”
The bank described as “excellent” its performance in Ireland, with pre-tax profits up by €71m to €490m.
The report said that lending was up by 24%, and the mortgage market was buoyant, with balances up by 27%. The bank also found costs were up by 7%.
Mr Goggin said: “We generate 56% of our profits in Ireland, 28% in the UK and 16% internationally.”
Bank of Ireland Life, the organisation’s life and pensions business, recorded a strong performance with operating profits up 17%.
The Asset Management Services division, which lost four of its key workers to a competitor last year, saw pre-tax profits fall by 8% to €115m over the same period last year.
Mr Goggin said: “It is going to take a little time to turn around the performance of our asset-management business.
“It is important to recognise that the specific issue we are dealing with is in relation to our North American EAFE product, we have underperformed.”
