Belfast Telegraph

Stormont power vacuum could affect long-term health of local economy, warns Bank of Ireland

Bank of Ireland’s Thomas McAreavey, Judith Hearty and Ian Sheppard with the lender’s new polymer banknotes, which entered circulation last month
Bank of Ireland’s Thomas McAreavey, Judith Hearty and Ian Sheppard with the lender’s new polymer banknotes, which entered circulation last month
Ryan McAleer

By Ryan McAleer

The Bank of Ireland has warned that the absence of a functioning Executive could alter the long-term growth of the local economy.

The latest annual report by the bank's UK business said the ongoing power vacuum at Stormont "remains a concern and a barrier to much-needed long-term strategic decision-making".

The lender said Brexit also presented risks to some of its customers.

The comments came as Bank of Ireland reported a £16m increase in the underlying profit of its Northern Ireland business to £69m during 2018. That was despite its income dipping from £147m to £145m last year.

As a whole, Bank of Ireland UK posted a pre-tax profit of £173m for 2018, 14.5% higher than in 2017. It came on the back of an 11.5% hike in its UK earnings to £525m. Last month the banking group's Dublin headquarters reported a fall in pre-tax profits to €835m (£724m) during 2018, down from €852m (£739) the year before.

Bank of Ireland's local operation includes 28 branches and six business centres, serving around 300,000 customers.

The group's latest annual report said the 30% increase in the underlying profit of its Nbusiness here was due to "consistent margin management and cost control, along with net impairment gains during 2018".

Bank of Ireland's NI commercial lending portfolio decreased by £100m to £1.2bn last year.

The lender said it set up consumer and business direct teams here during 2018, allowing customers to obtain borrowing facilities through a locally based telephone channel.

Bank of Ireland has also said that it's planning to add more staff within its branches here and extend opening hours.

Summarising last year's performance, the report said: "The franchise business in Northern Ireland had a solid 2018 in an otherwise mixed year for the regional economy.

"The local housing and labour markets remained steady, boosting the demand for mortgages and helping annual gross lending in the market to recover. After a difficult decade, the rate of housebuilding is accelerating gradually again with the number of "starts" rising to its highest level since 2007.

Total employment in the region reached a new record of 765,000 in Q4, although measures of inactivity and productivity continue to lag UK averages."

Belfast Telegraph

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