DUBLIN--Bank of Ireland PLC, the country's dominant lender,
Monday posted a much smaller loss for 2013 and said it is making
sustainable profit this year, for the first time since the
financial crisis struck in 2008.
The bank has emerged from the nation's banking wreckage and is
the only Irish lender to have escaped outright government control
during the long crisis. It says it has already paid back in full
its share of the huge sums injected by Irish taxpayers to keep the
banking system from collapse over the last six years.
Excessive lending during the boom years led to Ireland's
disastrous property bust. Eventually, the country was forced to
take an international bailout and Ireland formally emerged from
that bailout in December. The economy is at last showing signs of
recovery, and a return to profit by Bank of Ireland is another sign
that stability is returning to the country. "We are profitable and
generating capital in 2014," said Chief Executive Richie
Boucher.
The bank's underlying figure showed an annual loss of EUR569
million ($785 million), after a EUR1.49 billion loss in 2012. The
figure excludes items such as gains or losses it made from
disposals under restructuring.
It reported a net attributable loss of EUR487 million, after a
loss of EUR1.83 billion in 2012. Its pretax loss in 2013 totaled
EUR525 million, compared with a loss of EUR2.18 billion.
Before the cost of the now-expired Irish government's bank
guarantee, Bank of Ireland said its net interest income was about
EUR2.13 billion in 2013, after EUR1.75 billion in income a year
earlier.
The government, which phased out its industrywide banking
guarantee in 2013, had hailed the sale of EUR1 billion in so-called
contingent convertible, or Coco, notes, early last year, and the
disposal in December of EUR1.84 billion in preference shares it
held in Bank of Ireland, as signs that normality is returning to
Irish banks.
The Irish government now owns about 14% of Bank of Ireland, but
rather than selling down its remaining stake, it is likely to try
to sell a small stake over the next two years in Allied Irish Banks
PLC, effectively Bank of Ireland's only surviving large rival.
The government says that the economy is again producing jobs,
providing hope that the surviving broken lenders will return to
financial health. But it believes that Ireland's recovery will
require more lending than the country has at present.
Analysts say Bank of Ireland's return to profitability has been
helped because so many lenders have shut down or have been
liquidated, and there is now only limited competition for banking
services in Ireland.
Write to Eamon Quinn at eamon.quinn@wsj.com
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