Wednesday, November 5th – Bank of Ireland has this afternoon made a comprehensive detailed presentation to the Oireachtas Committee on Finance, Public Expenditure and Reform. This presentation gave an overview of Bank of Ireland’s operations in Ireland and the United Kingdom, and of the bank’s consumer, business and corporate businesses.
The presentation set out that Bank of Ireland has repaid in full the Irish taxpayers for a cash investment of €4.8 billion in the bank. €6 billion cash has been returned to taxpayers from this investment. Taxpayers also retain a valuable 14% discretionary shareholding in Bank of Ireland, with the bank currently having a market capitalisation of c10 billion.
The presentation also detailed that Bank of Ireland is the largest lender to the Irish economy. Bank of Ireland is providing over 50% of new non-property lending to SMEs in 2014, and has seen a particularly strong performance in agricultural, motor finance and commercial finance businesses. Bank of Ireland continues to provide more than 50% of new lending into the agricultural sector. In mortgages, the bank is providing one out of every three new mortgages in Ireland.
Bank of Ireland also updated the Committee on the recent ECB Comprehensive Assessment which confirmed that Bank of Ireland had passed the assessment with substantial capital buffers over the threshold capital ratios in both the baseline and adverse stress test scenarios, and noted Bank of Ireland‘s Interim Management Statement to the market of last Friday, October 31st, incorporating amongst other things Bank of Ireland’s capital strength underpinning its strategic objectives.
The presentation confirmed that the percentage of Bank of Ireland owner occupied mortgage accounts in arrears is less than half the total industry average at 47%. The number of owner occupied mortgage accounts in arrears has reduced by 24% from peak in the first six months of 2013.
In the first six months of 2014, where customers were identified as having potential or actual financial difficulties through the completion of a Standard Financial Statement (SFS), Bank of Ireland offered sustainable forbearance to 9 out of 10 of those owner occupier and 8 out of 10 of those buy to let customers.
The presentation also set out that Bank of Ireland has a significant partnership with the Post Office in the United Kingdom. This partnership is one of the largest challenger consumer banking franchises in the United Kingdom with c.3 million customers. The foreign exchange joint venture between Bank of Ireland and the Post Office is the largest provider of consumer foreign exchange in the United Kingdom.
A spokesperson for Bank of Ireland commented: “Following the repayment by Bank of Ireland of the Irish taxpayer – with a cash profit of €1.2 billion on their investment in the bank – today’s meeting is an opportunity for the Bank of Ireland Group to set out the full scale, scope and sustainability of its business. Bank of Ireland is the largest lender to the Irish economy, and is seeing an improvement in the economic environment in both Ireland and the United Kingdom, its core markets, providing positive momentum for its businesses underpinned by a robust capital and funding position.”
A full copy of the presentation made by Bank of Ireland to the Committee is available on request.