BANK OF IRELAND SET TO REDUCE FULL YEAR FORECASTS - Despite the slowing property market here, the country's biggest mortgage lender Bank of Ireland this morning announced underlying pre-tax profits for the six months to the end of September of €951m - a gain of 12% on the same time last year. Profits from its retail banking division in Ireland were up 12% at €381m.
Bank of Ireland's CEO Brian Goggin says the bank is seeing a slowing housing market here. Its mortgage volumes grew by 16% from September 2006 to September 2007, down from 23% in the full year to March 2007. He says that when BoI issued its pre-close guidance statement in September it said that it expected year on year growth to be around 12%. He said the bank had expected to see a recovery in the housing activity from September, but that recovery has not materialised and as a result, Mr Goggin said the bank would take that predicted 12% figure down further.
He says the revised figure is reflective of a sharper 'correction' than had previously been expected. The Bank of Ireland boss says that he is not concerned about the outlook for the Irish economy or the outlook for the mortgage market. 'The reduction in house prices is modest and will help stablise a situation that fundamentally had gotten somewhat out of control,' he says. However, he adds that the housing market will recover in 2008 and, more importantly, in 2009.
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AER LINGUS TO BUY 12 NEW PLANES - Aer Lingus has signed a new deal with Airbus for 12 new planes for its long-haul expansion plans. Under the deal, Aer Lingus also has a right to buy another six planes. The airline is going to buy six new A330 planes and six A350 planes.
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MORNING BRIEFS - The dark clouds are clearing for the time being over the world's stock markets. Wall Street enjoyed a big bounce yesterday with the Nasdaq closing up 3.5% and the Dow Jones up 2.5%. The rebound was led by a resurgence in technology shares on the news that Apple is doing a big deal in China and after the chief executive of Goldman Sachs reassured that his bank does not face big investment losses.
*** Goldman Sachs shared jumped 8.5% in value yesterday. That was its biggest gain in six and a half year suggesting that some banks, at least, are priced cheap at the moment.
*** On the currencies the euro is worth $1.46 and the euro is also worth 70.5 pence sterling.
