Bank of Ireland yesterday reported a 13.6 per cent improvement in underlying pre-tax profits to Irpounds 363.7m (pounds 374.6m) in the year to 31 March, although restructuring costs of Irpounds 48m following the merger of its US interests lowered final earnings.
Pre-tax profits after the US exceptional item were down Irpounds 6.2m on 1995 to Irpounds 315.6m, but earnings per share before the US charge matched expectations at 51.6p, up 17.8 per cent.
Retail earnings, up 7.5 per cent, were lower in Ireland and Britain than some had hoped against net interest margins down 10 per cent and tight competition. But deposits and credit balances in the Irish Republic and Northern Ireland rose strongly by 11 per cent in a more confident business climate.
Operating profit, up 14.3 per cent, was boosted by higher-volume turnover in key sectors including home loans, where the group's market share performed well. Tax of Irpounds 101.7m (27.8 per cent), was slightly lower than anticipated.
Surging Irish growth was reflected in net interest income up 7.4 per cent to Irpounds 46.7m, despite declining interest rates.
Operating costs rose 2.6 per cent, with staff costs up 9.6 per cent partly due to 250 new temporary staff and centralisation. Other operations, including asset management, stockbroking and life assurance divisions, failed to match early strong performance in the second half.
BoI's US First New Hampshire subsidiary, once a heavy loss-maker after its 1988 purchase, has been restored. US interests raised profits last year by 80 per cent last year to $78.5m (pounds 52m).
With its US holdings last month merged with the Royal Bank of Scotland's subsidiary, Citizens Financial Group, the 23.5 per cent BoI holding in the enlarged venture is valued at $435m. BoI received a further $215m in cash and $20m in loan notes on completion. BoI may participate fully in any new equity issue.
Group bad debt provision was slightly reduced from Irpounds 193m to Irpounds 184m as write-offs declined from Irpounds 50.7m to Irpounds 28.1m. Assets rose 12.2 per cent to Irpounds 21bn.
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