Bank of Ireland Swings Into Profit After Bond Exchange GainBy Joe Brennan - Feb 20, 2012 8:26 AM GMT+0100 Bank of Ireland Plc, the nation’s largest lender, swung into a full-year profit as a gain from a bond exchange eclipsed rising loan losses. Net income was 40 million euros ($53 million), compared with a 609 million-euro net loss in the year-earlier period, the Dublin-based lender said in a statement today. The bank recorded a 1.79 billion-euro gain from the bond swap, eclipsing a rise in loan losses to 1.94 billion euros from 1.86 billion euros. While loan impairments should “reduce over time” as the Irish economy recovers, a rebound “in our net interest margin has become more difficult,” as euro area and U.K. interest rates “will remain lower for a longer period than previously expected, Richie Boucher, chief executive officer, said in the statement. The net interest margin, the difference between its funding costs and lending rate, fell to 1.33 percent last year from 1.46 percent a year earlier. Bank of Ireland is alone among the country’s six largest lenders in escaping state control after the government sold a 34.9 percent stake last year to five investors, including Toronto-based Fairfax Financial Holdings Ltd. and WL Ross & Co., a New York-based investment firm. The bank raised 5.2 billion euros of capital last year following a stress test in March. Boucher set a target in April of selling 10 billion euros of assets and running down a further 20 billion euros of loans by 2013. It sold 8.6 billion euros of loans last year at an average 7.1 percent below face value. The bank’s underlying pretax loss narrowed to 1.52 billion euros from 3.46 billion euros a year earlier. http://www.bloomberg.com/news/2012-02-20/bank-of-ireland-swings-into-profit-after-bond-exchange-gain-1-.html |