TIDMBIRG
RNS Number : 7179U
Bank of Ireland Group PLC
26 October 2017
Bank of Ireland Group plc (the "Group")
Interim Management Statement - Q3 2017 update
26 October 2017
Trading
The Group continues to trade in line with expectations.
Economic growth in our core markets of Ireland and the UK
remained positive notwithstanding ongoing uncertainties related to
the UK's decision to leave the European Union.
Net interest income was in line with the first half of 2017. Our
net interest margin for the 9 months to September 2017 was 2.34%,
reflecting our evolving asset mix and reductions in the cost of
funding, partially offset by the ongoing impact of the low interest
rate environment and excess liquidity on the quantum of liquid
assets. Our recent Tier 2 capital issuance of EUR0.75 billion will
reduce our net interest margin from Q4 2017 onwards by c.3bps.
Business income has remained in line with the first half of
2017.
The Group has continued to maintain tight control over our cost
base, while making appropriate investments in our businesses,
infrastructure and people including our multi-year business
transformation investment programme which continues to make
progress.
Balance Sheet
Customer loan volumes were EUR77 billion at the end of September
2017.
New lending of EUR10 billion for the 9 months to September 2017
was c.3% higher than the same period in 2016 on a constant currency
basis and included a c.38% increase in ROI mortgage volumes. Our
market share of ROI new mortgage lending for the first 8 months of
2017 was 26%, a 1% increase from 2016.
Customer deposits were EUR75 billion and wholesale funding was
EUR13 billion at the end of September 2017.
Asset quality across our loan portfolios has continued to
improve. Non-performing exposures have reduced by EUR0.4 billion
since the end of June 2017 to EUR7.7 billion at the end of
September 2017. Impaired loans have also reduced by EUR0.4 billion
during the same period to EUR5.0 billion.
Capital Position
The Group's fully loaded CET 1 ratio increased by 30bps from
12.5% at the end of June 2017 to 12.8% at the end of September
2017.
The Group's organic capital generation during the quarter was
partially offset by the impacts of the investment in our business
transformation programme and a modest increase in the IAS 19
accounting standard defined benefit pension deficit; consistent
with H1 2017, the Group has made a deduction for a potential
dividend in 2018 in respect of the 3 month period to end September
2017.
At the end of September 2017, the Group's transitional CET 1
ratio was 14.7%, and the Group's Total Capital ratio was 18.9%
which reflects the benefit from the Group's recent Tier 2 capital
issuance.
Tracker Mortgage Examination Review
The Group continues to progress the work associated with the
Tracker Mortgage Examination being undertaken by the Central Bank
of Ireland.
-- In 2010, prior to the current Examination and under the
direction of the Central Bank of Ireland, the Group undertook a
desk based review of tracker rate mortgage switches. This resulted
in the remediation of c.2,100 accounts and a further c.3,000
customers were offered the option of returning to a tracker rate at
the end of a fixed term.
-- Under the current Examination, the Group has identified c.600
accounts where a right to, or the option of, a tracker rate was not
appropriately provided to the customer in accordance with their
loan documentation. The Group has also identified a small rate
differential (average 0.15%) on c.3,700 tracker mortgages which was
not the appropriate rate specified in the loan documentation.
-- All c.4,300 impacted customers were returned to their correct
tracker rates between March 2016 and August 2017.
-- The Group has committed to communicating the compensation
process to these impacted customers from 10 November 2017.
The Group will continue to review whether other customers should
be included in the compensation process and will ensure that any
such impacted customers will be treated fairly. To the extent that
an additional provision associated with this review is required,
the Group anticipates this to be manageable in the context of the
Group's capital position outlined above. A further update will be
issued in mid-November.
Ends
For further information please contact:
Bank of Ireland
Andrew Keating Group Chief Financial Officer +353 (0)766 23
5141
Alan Hartley Director of Group Investor Relations +353 (0)766 23
4850
Pat Farrell Head of Group Communications +353 (0)766 23 4770
Forward Looking Statement
This announcement contains certain forward-looking statements
with respect to certain of the Group's plans and its current goals
and expectations relating to its future financial condition and
performance, the markets in which it operates, and its future
capital requirements. These forward-looking statements often can be
identified by the fact that they do not relate only to historical
or current facts. Generally, but not always, words such as 'may,'
'could,' 'should,' 'will,' 'expect,' 'intend,' 'estimate,'
'anticipate,' 'assume,' 'believe, ' 'plan,' 'seek,' 'continue,'
'target,' 'goal', 'would,' or their negative variations or similar
expressions identify forward-looking statements, but their absence
does not mean that a statement is not forward looking. Examples of
forward-looking statements include among others, statements
regarding the Group's near term and longer term future capital
requirements and ratios, loan to deposit ratios, expected
impairment charges, the level of the Group's assets, the Group's
financial position, future income, business strategy, projected
costs, margins, estimates of capital expenditures, discussions with
Irish, United Kingdom, European and other regulators and plans and
objectives for future operations.
Nothing in this announcement should be considered to be a
forecast of future profitability, dividends or financial position
and none of the information in this document is or is intended to
be a profit forecast, profit estimate or dividend forecast. Any
forward-looking statement speaks only as at the date it is made.
The Group does not undertake to release publicly any revision to
these forward-looking statements to reflect events, circumstances
or unanticipated events occurring after the date hereof.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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