Bank of Ireland reports half yearly loss of $1.5 billion
Bank of Ireland struggles in tough economic climate
Bank of Ireland’s 2012 half yearly report was announced on Friday. The report failed to show any uplifting news in regards to the current economic climate in Ireland.
RTE reports on Bank of Ireland’s 2012 half yearly report. The Bank reported a half yearly pre-tax loss of $1.5 billion, an increase from the $683 million loss for the same time last year.
Bank of Ireland said it is making progress in weaning itself away from State support to borrow money.
Its net interest margin - the gap between what it costs the bank to raise money and what it charges to lend it - is under pressure and has dropped from 1.33% to 1.2%.
Bank of Ireland said the number of customers falling behind on their mortgage repayments has continued to increase. However, the Bank did note that through some economic stabilization and its own initiatives, the rate of increase was reduced during the first half of 2012, a trend the Bank expects to continue.
Richie Boucher, Bank of Ireland’s Chief Executive, said “'The first half of 2012 has been a very difficult environment in which to operate.”
“Whilst the Irish economy has begun to stabilise, it remains a challenging environment in which to manage credit costs and sell new products.”
The bank said its operating profits, before impairment losses, fell to $71m from $204m. Its income for the six-month period dropped to $1.1m from just over $1.2m the same time last year.
Bank of Ireland said its retail Ireland division reported operating profits, before impairment charges, of $69m for the first half of the year, down from the figure of $197m in the first half of 2011. Operating profits at its UK division slumped to $11m from $116m the same time last year.
Operating profits at its Corporate and Treasury division dropped to $306m from $339m, but profits at its Bank of Ireland Life operation rose to $46m from a loss of $34m last year.
"The impact of pension costs and the government pension levy has offset somewhat the impact of continued wage restraint and lower staff numbers," CEO Richie Boucher said in Friday's results statement.
In response, Bank of Ireland has begun a plan to lay off 1,000 of its 13,200 employees, even though its operating costs were broadly flat in the first six months, remaining within $1 billion.
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