Central Bank reported highest ever profit last year

Wednesday 30 April 2014 17.18
Central Bank to pay a dividend of €1.2 billion to the Government
Central Bank to pay a dividend of €1.2 billion to the Government

The Governor of the Central Bank has said he is sure that the regulatory failures criticised by the judge in the Anglo Irish Bank trial would not happen under the new regime that has been put in place.

Professor Patrick Honohan was speaking at the publication of the Central Bank's annual report, which shows the bank made a profit of €1.5 billion last year, its highest profit ever.

It will pay a dividend of €1.2 billion to the Government.

The annual report also shows the number of regulatory actions taken by the bank increased from 841 in 2012 to 1,004 last year.

The Governor of the Central Bank also warned the Government to stick to the path of fiscal consolidation, saying that the need for public finances to stay on course is intensified by the fact that the Troika is no longer around to ensure compliance.  

"Financial markets are right to assume that a disciplined approach will be maintained: it would be folly to allow any other supposition to gather credence", Professor Honohan said.

Professor Honohan also told a news conference that efforts to deal with mortgage arrears were "broadly on track," but that it was unclear if house prices were still undervalued after climbing 8% last year.

He also said he was satisfied with stress test scenarios announced by the European Banking Authority for Irish lenders.

Asked his view on the possibility of a merger between Ulster Bank and Permanent TSB, Mr Honohan said it was something he read about in the newspapers, not something he was involved in discussions about.  

He said the Central Bank's only concern was that if there was to be any such merger, that it would be done well. He also said there was no reason why PTSB could not continue as a stand alone mortgage bank.

The Governor also said today that there was a need for a banking inquiry. He said it was unlikely it would reveal anything new about the causes of the banking crisis, but holding a public inquiry would be a good way of communicating what happened to the public, which would help to restore confidence in the regulatory system and public affairs in general.