Bank of Ireland not to buy or sell impaired loans
Bank of Ireland will pay its first dividend to shareholders since the financial crisis and the bank has proposed an 11.5 cent per share dividend after reporting full year results showing an underlying profit of €1.098 billion for 2017. Profit after tax was €799m up from €692m the previous year after allowing for a €170m charge in respect of tracker mortgage customers who were overcharged by the bank. Impairment charges were down, though, from €176m to €15m.
Bank of Ireland's chief executive Francesca McDonagh said the resumption of a dividend payment for the first time in ten years was a truly pivotal moment for the bank. Ms McDonagh also said the bank is the largest lender in the Irish economy for the fourth year in a row which reflects strong support for Irish businesses.
Ms McDonagh also said that the bank has "zero" plans to bid for Permanent TSB's Project Glas portfolio of non-performing loans, adding that the bank has no plans to buy or sell any non-performing loans.
On the tracker mortgage controversy, Ms McDonagh said she had given a personal commitment to address the issue and she said the bank had made some "good progress" on what had been a very difficult time for its customers. The CEO said the bank had made an offer and redress to 92% of customers affected by the tracker issue and every impacted customer have been put back on their correct rates. The bank has also offered to pay out €117m to customers and they are responding to those offers. She added that affected customers do have the right to appeal their payouts. Ms McDonagh stressed that the bank expects to have made contact with all affected customers, subject to their agreement, by the end of March 2018. The bank is on track for that target, she added.
Francesca McDonagh said that the tracker mortgage problems goes back to culture and transformation at Bank of Ireland. She said the bank is looking to transform its culture, its technology and its business models and the bank has published a new set of values which the CEO is asking every Bank of Ireland employee to live by. The CEO also said the bank is looking to improve its systems and processes and she said that since she arrived at the bank, as well as spending a lot of time on the tracker issue, she has also invested a lot of time on the bank's future strategy and investment. She said that trust needs to be built up in banks and bankers, while also supporting Irish businesses and the Irish economy. She believes that Bank of Ireland will look "very different" by next year and very different again the year after that.
Bank of Ireland has 250 branches around the country, and McDonagh said the bank has the biggest physical footprint of all the Irish banks. She said that while sometimes a branch has to close as not enough people are using it, the bank is investing €10m on its branch network including a new FDI centre on College Green in Dublin.
MORNING BRIEFS - Irish hotels saw their seventh consecutive year of growth in visitor numbers in 2017. Occupancy rates across hotels here ticked up by a single percentage point to 73%, the highest for 12 years.
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