Bank unveils sweeping changes to operations
Shares in Bank of Ireland fell yesterday after chief executive Francesca McDonagh unveiled an ambitious new growth plan.
The plan ramps up the lender's capital expenditure outlay by €500m (£440m), reduces costs and boosts lending by a fifth over the next three years.
The much-anticipated strategy reboot will widen and accelerate the group's upgrade of its technology platform.
Ms McDonagh also laid out sweeping changes to the UK operations as the bank adopts a more selective approach to the market in a bid to pump up returns, which are currently languishing in the single digits.
According to Owen Callan, an analyst with Investec Ireland, the group is styling itself more as a challenger bank in the UK, "stepping away from the mainstream banks which have an entrenched position on the high street" - a move he predicts will deliver the same volume in a growing market.
Ms McDonagh pointed out the group "does more business" daily in the UK market than in Ireland, where its market share sits at 28% - slightly behind AIB.
Mr Callan argued the 1.79% slide in the share price to €7.12 was only to be expected after news of such a "big number" on the capital expenditure hike. Alongside the rise in spending are ambitious plans to cut the cost base by €200m (£176m) to €1.7bn (£1.5bn).