Loans increased at Bank of Ireland in the nine months leading up to September 30, as the economy continues to recover from Covid restrictions.
According to a business update from the bank, new loans rose 7% in the nine months to the end of September compared to the previous year.
Bank of Ireland’s trading revenues are “as expected”, with an 8% increase in revenues over the nine-month period, supported by growth in its Wealth and Insurance divisions.
The bank’s net interest income – a key measure of a bank’s profitability – is 2% higher in the nine months through September of this year compared to the same period in 2020 due to the reduction in financing costs and increased application of negative interest rates on certain deposits.
The bank’s customer loan volumes were “stable” at € 76.7 billion at the end of September, against € 76.6 billion at the end of December.
Customer deposits amounted to € 91.3 billion at the end of September.
The bank saw its net lending growth of 700 million euros in Retail Ireland and Corporate during the nine-month period.
“During the third quarter of 2021, we saw a continued recovery in activity, supported by a more positive environment and economic outlook. The continued improvement in our performance in the third quarter translates into higher revenues, lower costs and a capital increase, ”said Francesca McDonagh, CEO of Bank of Ireland Group.
“The continued execution of our strategy resulted in a 17% increase in operating profit before impairment at the end of September 2021 compared to the same period in 2019, before Covid-19. “
The bank said it continues to maintain tight control on the cost basis. Operating expenses (excluding levies and regulatory charges) were 4% lower during the nine months ended September 30 compared to a year ago.
Last Friday, Bank of Ireland reached a binding agreement on the sale of 5 billion euros of sound loans from KBC. She is also in the process of buying out the Davy stockbrokers.
Ms McDonagh said the bank is “moving forward” on its deals with KBC and Davy.
Completion of these two transactions is expected next year, subject to regulatory and competition approvals.
“Both transactions support our business growth strategy and are financially transformative, supporting our goal of delivering ROTE [return on tangible equity] more than 10% in the medium term, ”added Ms. McDonagh.
Earlier this month, the Competition and Consumer Protection Commission (CCPC) announced that it would conduct a full “phase 2” investigation into the proposed Bank of Ireland – KBC transaction, which could take five month.
Meanwhile, the Ministry of Finance is moving ahead with the sale of the state’s stake in Bank of Ireland, with the stake now below 10 percent.
“This is a positive development – for Irish taxpayers, the Irish economy and the Bank of Ireland,” said Ms McDonagh.