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Bank of Ireland profit for 2021 tops €1 billion

Bank of Ireland
/ 28th February 2022 /
Nick Mulcahy

Bank of Ireland has reported a net profit of €1,055m for 2021 and announced dividends of €54m and €50m for ordinary share buyback.

Chairman Patrick Kennedy said the dividend will be 5c a share while the share buyback is subject to regulatory approval.

CEO Francesca McDonagh stated: "In 2021 we achieved a 25% increase in operating profit pre-impairment when compared to 2019 (pre-pandemic).

"We grew income, reduced costs for the eighth consecutive reporting period, and significantly increased capital ahead of the anticipated completion of two transformational acquisitions of Davy and KBC Ireland’s portfolios.

"The outlook across our core markets is positive. We see continued momentum as we execute our strategy, leading to growth in sustainable returns for shareholders. This underpins our target to deliver a sustainable return on tangible equity in excess of 10%.

In Association with

"We look forward to becoming the first Irish bank to return to full private ownership this year."

Bank of Ireland profit 2021
Source: Euronext Dublin

Net interest income was 5% higher than 2020, reflecting reduced funding costs and the increased application of negative interest rates on certain deposits offsetting the impact of low rates.

Business income increased 15% compared to 2020. The Wealth and Insurance division was 24% higher, Corporate and Markets 13% higher, and Retail Ireland 3% higher.

Operating expenses (excluding levies and regulatory charges) are 4% lower in 2021 compared to 2020. The bank said that staff costs reduced by 8%, reflecting a 11% reduction in people employed since December 2020.

Customer loan volumes were €76.3bn at the end of December 2021, €0.3bn lower compared to December 2020.

Customer deposits were €92.8bn, €4.2bn higher than December 2020.

The bank said that its impairment outlook is expected to remain benign in 2022, with the impairment charge expected to be below normalised levels. The bank also expects NPEs to continue to reduce.

"We expect continued strong capital generation in 2022 and the capital outlook supports continued growth and investment. Distributions are expected to increase on a prudent and progressive basis," McDonagh added.

The bank's total customer loan book was static year-on-year.

Bank of Ireland shares were marked down by investors as they digested the results.

Image: Pictured at the announcement of Bank of Ireland's 2021 Annual Results are Francesca McDonagh, Chief Executive and Myles O'Grady, Chief Financial Officer. Pic: Naoise Culhane

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