Bank of Ireland racks up £1.2bn losses but outlook is improving
Bank of Ireland managed to reduce its losses by a fraction last year but said it continues to operate in a difficult economic environment.
The bank, which is 15% owned by the Irish State, reported an underlying loss of €1.4bn (£1.2bn) in 2012, down slightly from the €1.5bn (£1.3bn) it lost in 2011.
A fall in the amount of money it sets aside to protect against bad property debt – impairment charges – of around €200m (£172m) helped the top line figure, one which doesn't include asset sales made by the bank in 2011.
Still, chief executive Richie Boucher said it still faces difficult headwinds.
"While the economic environment has improved somewhat in recent months, it still remains difficult and the group continues to face many challenges," he said.
"However, we are starting to see some of the benefits flowing from the focus we have had over the past four years on our strategic objectives aimed at enhancing our core franchises and rebuilding profitability within a restructured, robust balance sheet."
And he said shareholders won't be left behind.
"My colleagues and I must, and will, continue to keep this focus during 2013 as we strive to reward our shareholders for their patience and their confidence in the group."
Meanwhile, a further breakdown of the figures showed impairments were split with €462m (£400m) accounted for in the property sector and €797m (£686m) in the construction sector.
The results also showed the Irish state received €3.8bn (£3.2bn) in payments of its support of the bank, returns on its investments and repayment of investments.
As far as analysts are concerned, the results represent a relatively good performance in difficult conditions.
"This looks like a reasonable set of results in challenging times," Eamonn Hughes from Goodbody Stockbrokers commented.
And that has helped paint a more positive outlook.
"The outlook for the bank seems positive with margins expected to improve and signs that the impairment charges may have bottomed," according to Muna Muleya from Merrion Capital.
Emer Lang from Davy Stockbrokers agreed.
"The focus on restoring the bank to profitability is reflected in a welcome improvement in the pre-provision profit line while impairments continued to be contained," she said.