Despite fears of inflation, the Bank of Ireland reports an optimistic start to 2022

The Bank of Ireland has reported a “positive start” to the year, with a €0.4 billion increase in net lending to retail and corporate customers in Ireland.

With declining customer loan volumes and deposits, costs have fallen and capital ratios have risen, the bank said in its interim report.

The Bank of Ireland reported a €0.4 billion increase in net lending to retail and corporate customers in Ireland in the first three months of the year compared to December 2021.

Customer deposits fell by €1.5 billion in three months to €91.3 billion at the end of March, reflecting lower deposits from retail and corporate customers and markets in the UK.

Customer loan volume also fell to 75.2 billion euros at the end of March 2022, compared to 76.3 billion euros at the end of December last year.

The EUR 0.4 billion increase in net retail lending was offset by EUR 1.3 billion of UK deleveraging and EUR 0.2 billion of foreign exchange and other effects.

The share of green mortgages in total lending has nearly doubled over the past 12 months, accounting for 43 percent of new mortgage loans, with green business banking accounting for 11 percent, up from 6 percent in the first three months of 2021.

The bank is strongly capitalized with a core capital ratio (CET1) of 16.3 percent (vs. 16 percent in December) and a regulatory CET1 capital ratio of 17 percent.

The Group’s net interest margin was 1.75% in the first quarter of 2022, reflecting a negative impact of 15 basis points from a European Central Bank loan expected to be settled in June.

Business revenue rose, with property and insurance revenue up about 10 percent, the bank said.

Expense fell 1 percent in the quarter compared to the first quarter of 2021 while there were “modest loan losses,” the bank said.

So far, 17 million euros have been purchased from a share buyback program worth 50 million euros, the bank said.

It comes after the Treasury announced a further extension of its share trading plan, with the Irish state’s stake in the group now falling to less than 5 per cent.

Outgoing Bank of Ireland Group chief executive Francesca McDonagh said the group had had a “positive start to 2022” and that the ongoing government sell-off “supports positive outcomes for Irish taxpayers, the economy and the group”.

“General business momentum remains positive, but we are vigilant for the impact of higher inflation on customer sentiment stemming from higher commodity prices and exacerbated by the unacceptable invasion of Ukraine,” she said.

“We have also taken a number of proactive steps to support humanitarian assistance and stand ready to do more.”

The bank said it is continuing to advance regulatory approvals for the Davy and KBC Ireland portfolios. Despite fears of inflation, the Bank of Ireland reports an optimistic start to 2022

Fry Electronics Team

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