11th May 2020 10:05
(Alliance News) - Bank of Ireland Group PLC on Monday said it said it suffered a massive swing to a first quarter loss, with the Dublin-based lender hit by ballooning impairment costs and market volatility.
Bank of Ireland said it has approved 86,000 payment breaks to personal and business banking customers since mid-March, when the Covid-19 pandemic began to grip Europe.
It reported a pretax loss of EUR241 million in the three months to the end of March, from a EUR123 million profit a year before.
Bank of Ireland incurred net impairment charges of EUR266 million, ratcheted, up from EUR43 million in the first quarter of 2019. Costs this year included a "Covid-19 management overlay", the lender said.
Bank of Ireland warned of "expected increased impairment and loan loss experience over the course of 2020".
Also weighing on earnings was market volatility, Bank of Ireland suffered a EUR155 million loss through "adverse movement in valuation".
Net interest income was in line with expectations in the quarter, the company said, nudging 0.4% higher year-on-year to EUR540 million.
Chief Executive Officer Francesa McDonagh said: "We made a good start to the year - growing lending, selling more than a quarter of all new mortgages in Ireland, reducing costs, and with the lowest level of arrears of any Irish bank. However, right now everything is seen through the lens of Covid-19.
"The group's purpose - to enable our customers, colleagues, and communities to thrive - is more important than ever. Covid-19 hit our markets fast and hard."
The company paid no first quarter dividend, in line with guidance from the European Central Bank.
Its fully loaded CET1 ratio slipped to 13.5% from 13.8% in the year prior, and Bank of Ireland said it has weighed a "range of scenarios" and does not see the ratio slipping below to 11.45% regulatory minimum.
Shares in the company were 5.6% lower at EUR1.56 each in London on Monday morning.
By Eric Cunha; [email protected]
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