Bank of Ireland reports a £1bn pre-tax loss
The last of Northern Ireland’s ‘big four’ banks to report first half results has shown it’s still paying a high price for the slump in property prices since 2008.
Bank of Ireland said its operations across the island of Ireland made an underlying pre-tax loss of €1.25bn (£0.98bn) in the six months to the end of June, more than double the loss made in the same period last year.
The beleaguered economy and more expensive borrowing costs for the bank itself were said to be to blame while an increase in impairment charges — money set aside by the bank against loans it doesn’t expect to be repaid — also dented the half-year figures.
Recent results for two of Northern Ireland’s other big banks, Northern Bank and Ulster Bank, over the same period revealed a reduction in impairments for both in the first half of the year, although the burden of bad property debts still looms large on the balance sheets of most banks.
Impairment charges for Bank of Ireland stood at €941m (£740m) in the first half, up €100m (£79m) on the same period in 2011.
But Bank of Ireland’s chief executive Richie Boucher said: “While the Irish economy remains challenged and our impairment charges remain elevated, we expect the impairment charges to reduce from this level, trending to a more normalised level as the Irish economy recovers,” he said.
The bank has already announced plans to cut 950 jobs from its 13,000 workforce.