Bank of Ireland posts profit before tax of 465 million euros for the first half of the year
Bank of Ireland reported underlying pre-tax profit of € 465 million for the first half of this year, as its loan loss charges plunged and total income rose.
The bank’s loan impairment charge for the period was € 1 million, compared to € 937 million for the same period last year, when the bank set money aside for cover expected loan losses from Covid-19. The lower fees for this year “reflect the improved economic outlook and lower loan losses over the period,” he said when releasing his interim results on Tuesday.
Bank of Ireland recorded an underlying loss of € 669 million for the corresponding period in 2020.
Total income rose 14% in the six months leading up to June and the bank, led by Managing Director Francesca McDonagh, expects it to rise 5% in the second half of the year due to rising interest and income from company.
Bank of Ireland said its capital reserves are sufficient to support the purchase of the sound loans from KBC Bank Ireland, amounting to almost € 9 billion, as the Belgian lender exits the Irish market, as well as the acquisition of most of Davy’s activities in one that will cost him up to 480 million euros. The two planned acquisitions have been announced in recent months.
In addition, the bank said it would also have money to restart distributions to shareholders “on a prudent and progressive basis depending on performance and capital outlook.” Analysts generally expect the bank to resume paying dividends early next year after a two-year hiatus amid the Covid-19 crisis.
The bank’s capital reserve ratio, or common equity Tier 1 capital (CET1), stood at 14.1% at the end of June, up 0.7 percentage point over the year.
“Our results today and our outlook for the future are radically different from 12 months ago,” said McDonagh. “In the first half of 2021, we experienced a strong recovery in our commercial performance. We continued to implement our strategy, including investing in digital and transforming our business.
“If we put aside the turbulent year of 2020 and compare our results to the same period in 2019, our underlying operating profit, before depreciation, is up 7%.
“While Covid-19 is still with us, there is a road to recovery. Comprehensive vaccination programs release the vice-like grip that Covid-19 has had on our economies and our society. Our economic outlook is increasingly positive with a sense of returning to pre-pandemic levels. “