Bank of Ireland sees ‘significant’ progress in 2013

Bank of Ireland’s shares fell 7.1 per cent in Dublin yesterday in spite of it announcing it was back in profit and generating capital. Like most stocks in Europe yesterday, the Irish bank suffered from the fallout of political tensions in the Ukraine.

Bank of Ireland reported a "significant" improvement in its full-year results for 2013, with pretax losses narrowing to €569 million from €1.5 billion last year. "We are profitable and generating capital," said Bank of Ireland chief executive Richie Boucher.

The bank’s loan impairment charges fell to €1.66 billion from €1.77 billion in 2012. Its underlying profit before impairment costs was €1.06 billion in 2013 compared with €224 million in the previous year.

This measure of profitability accelerated in the second half of the year to €685 million from €380 million in the first half, reflecting improvements in the Irish and UK economies and the measures undertaken to repair the bank over five years.

The bank’s level of defaulted loans fell by €1.2 billion in the second half to €17.1 billion, across all major categories.

While the volume of default mortgage arrears (based on loan volumes 90 days or more past due and or impaired) has continued to increase, the pace of default arrears formation has reduced significantly in the year, particularly in the owner-occupied segment.