Bank of Ireland, listed with the ticker BIRG, has published its financials for the first half of 2020, showing a loss of €669 million (over $791 million) before taxes.
Per the filings with the London Stock Exchange (LSE), the grave loss was propelled by the €937 million the bank had put aside to cover its 105,000 COVID-19 loan repayment breaks.
In its interim report published today, the Irish lender also warned that the annual loan-loss charge is expected to fall between €1.1 billion and €1.3 billion.
“Our priority in the pandemic has been to proactively support our customers, colleagues, and communities, and to stay focussed on delivering our strategy,” Francesca McDonagh, the Group CEO, said in a statement.
Optimistic With Future Projections
She is also expecting a lending volume drop by 30 percent this year, citing the 20 to 30 business income slide is due to the pandemic. This recent forecast, however, is better than the projections in May, when the bank was preparing up to 50 percent lending drop.
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“Notwithstanding the challenges, we’ve increased our market share in Irish mortgages, reduced costs, and continued to improve our products and services especially through digital,” McDonagh added.
Though the bank positioned itself with a fully-loaded CET1 capital ratio of 13.6 percent and a regulatory CET1 capital ratio of 14.9 percent.
As well as that, the Irish bank is focusing on cost reduction and has ambitious plans to save €200 million over the next 3 years. It added €50 million to that figure, just prior to the COVID-19 crisis, to save by the end of 2021.
For the first half of 2020, the bank reported a net cost reduction of €31 million.
“Our outlook is cautiously more optimistic than our quarter one trading update, resulting in revised guidance for the rest of 2020 in terms of new lending and business income. We remain committed to continuing to support our customers, and helping reboot the economy, in the time ahead,” the CEO concluded.