Bank of Ireland has posted an underlying pre-tax profit of €465 million for the first half of 2021, as its loan loss charge plunged and total income rose.
The bank’s loan impairment charge for the period came to €1 million, according to The Irish Times.
This was down from €937 million for the same period last year, when the bank set aside money to cover expected loan losses from Covid-19.
The lower charge for this year “reflects the improved economic outlook and muted loan loss experience in the period”, the bank said as it reported interim results on Tuesday.
Bank of Ireland posted an underlying loss of €669 million for the corresponding period in 2020.
Total income rose 14 per cent in the six months to June and the bank, led by chief executive Francesca McDonagh, forecast that it will increase by five per cent in the second half on the back of higher interest and business income.
Bank of Ireland said its capital reserves are sufficient to support the purchase of KBC Bank Ireland’s performing loans, amounting to almost €9 billion, as the Belgian lender exits the Irish market, as well as the acquisition of most of the business of Davy in a deal that will cost it up to €480 million. Both planned acquisitions were announced in recent months.
In addition, the bank said that it will also have money for shareholder distributions to recommence “on a prudent a progressive basis based on performance and capital outlook”.
Analysts broadly expect the bank to return to paying dividends early next year after a two-year hiatus amid the Covid-19 crisis.