27th Apr 2022 11:20
(Alliance News) - Bank of Ireland Group PLC shares were struggling on Wednesday as the bank's loan book fell over the first quarter and as it prepares warily for the consumer impact of higher inflation.
Shares in the Dublin-based lender were down 8.1% in London on Wednesday at EUR6.16 each.
"The group has made a positive start to 2022 with income, costs and capital all performing in line with expectations. We continue to deliver on our strategic and customer priorities," Chief Executive Francesca McDonagh said.
Bank of Ireland's net interest income in the first quarter was "broadly stable" from the year prior. The lender said it was able to maintain strong commercial pricing discipline with higher loan asset spreads versus last year.
Net interest margin was 1.75%, the bank noting it had to take a 15 basis point hit from its participation in targeted longer-term refinancing operations, or TLTROs, which is expected to unwind in June 2022.
Its Business income increased, supported by growth in Retail Ireland, Wealth and Insurance, and Corporate and Markets income.
Bank of Ireland noted it was able to "maintain tight control" over its cost base.
It did, however, see a "modest" net credit impairment in the first quarter - which was, it stressed, in line with expectations.
"Macroeconomic scenarios impacting credit impairment will be refreshed to reflect updated market forecasts and captured as part of the group's half-year credit impairment process," the bank said.
Its non-performing exposures decreased by EUR200 million over the quarter, standing at EUR4.1 billion at March 31.
Bank of Ireland ended the period with a CET1 ratio of 16.3%, rising from 16.0% at the end of 2021.
"Overall business momentum remains positive, but we are vigilant to the impact of higher inflation on customer sentiment arising from higher commodity prices and exacerbated by the unacceptable invasion of Ukraine," McDonagh said.
By Paul McGowan; [email protected]
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