Bank says macroeconomic conditions in Ireland ‘remained favourable’

Bank of Ireland continues to trade “in line with expectations”, the company said today in advance of its annual shareholders meeting.

It said improvements were achieved in the volume of non-performing loans while new lending increased. But its pension deficit widened and its UK loan volumes reduced due to sterling weakness.

In Ireland, the export sector continued to expand and domestic activity increased as improving labour market conditions and other factors positively impacted consumer spending. In the UK, where the bank is focussed on the domestic sector, the economy expanded in the first quarter, notwithstanding some uncertainty relating to the upcoming Brexit referendum.

“Our regulatory capital ratios are substantially hedged from currency translation impacts. However, given that sterling weakened by 7 per cent during the first quarter vis-a-vis our euro reporting currency, this has impacted reported balance sheet assets and liabilities as well as items in the profit and loss account.” On a constant currency basis, Bank of Ireland said its net interest income had performed in line with expectations during the first quarter. “Customer loan asset spreads remain in line with H2 2015 levels and we are continuing to take actions to  reduce the cost of our funding,” it added.

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