3rd Aug 2022 14:38
(Alliance News) - Bank of Ireland Group PLC on Wednesday posted a decline in interim profit, as it continues to battle against "global uncertainty".
The Dublin-based lender reported underlying pretax profit of EUR419 million during the first six months of 2022, down 9.9% from EUR465 million for the same period in 2021. However, it said that total income was "modestly" higher in the period, excluding additional gains, valuation items and acquisitions.
"Lower funding costs due to improved UK deposit margins and expansion of negative interest rates on deposits, offset by higher wholesale funding costs," Bank of Ireland explained.
A net credit impairment charge of EUR47 million was also recorded in the period, compared to a EUR1 million charge the year before. Bank of Ireland said that this reflected wider macroeconomic uncertainty.
Away from results, the company said that its strategy has been further enhanced through two "transformative" acquisitions. During the first six months of the year, Bank of Ireland completed its acquisition of Davy, whilst it also received competition approval for KBC Bank Ireland portfolio, which is expected to be complete by the end of quarter one next year.
Bank of Ireland noted that on a pro-forma basis, assuming Davy was acquired January 1, underlying profit of EUR12 million would have arisen in the six months. The lender added that it expects a similar performance in the second half of 2022.
Looking ahead, Bank of Ireland expects "modestly higher" net interest income and higher business income compared to 2021.
Bank of Ireland also said that it is "well advanced" on the process to appoint Chief Executive Officer Francesca McDonagh's successor. However, given timing considerations, it expects to appoint an interim CEO.
McDonagh said: "Notwithstanding global uncertainty, the step change we've delivered in our business model makes Bank of Ireland well positioned to capitalise on the significant opportunities we face, further supported by a rising interest rate environment."
Bank of Ireland shares were trading 3.3% higher at EUR5.84 each in London on Wednesday afternoon.
By Sophie Rose; [email protected]
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