Bank of Ireland profit falls; plans 2018 dividend

Bank of Ireland's shares dropped as much as 2.2 percent in Dublin, giving the company a market value of 7.4 billion euros. We don't expect the same volatility in bond yields as we had in the first half of past year but we do want to make sure that continues to be the case.

The bank's operating profit slumped by €338m to €24m, as it freed up less money previously set aside for bad loan losses than it released in 2015.

"2016 was a year of solid progress for Ulster Bank, enhancing our competitive positioning and building a simpler, safer, more sustainable Bank", he added. However, profits at its United Kingdom retail division (down 24 per cent in sterling terms), and its corporate and treasury unit declined during the year.

Bank of Ireland finished the year with a common equity tier 1 capital ratio, a key measure of financial resilience, of 12.3%.

He said the bank had continued to reduce its non-performing loans by 4.1 billion euros or 34 percent since December 2015 and that its impairment charges had continued to fall.

"From a Brexit point of view, we haven't seen any material negative impacts, other that the translation impact on our profits from our United Kingdom business", Bank of Ireland Chief Executive Richie Boucher told Reuters in a telephone interview, describing the dividend decision as a finely balanced call.

Its core loan book rose, led by a 6 percent increase in new lending in Ireland where it benefited from continued stellar economic growth.

The bank, which is 14 percent owned by the government, said it would not pay shareholders a dividend until 2018.

"In addition, political events, in particular the UK's decision to leave the European Union, may impact on our customers and our business growth in the coming years".

Ulster Bank said today over 1,800 accounts have been restored to tracker rates, while Bank of Ireland also said 600 of its customers have been moved back.

  • Zachary Reyes