STATE BoI STAKE TO STAY MINORITY - BOUCHER - Bank of Ireland has reported an underlying pre-tax loss of €2.9 billion for the nine months to the end of December, after setting aside more than €4 billion for loan losses.
The €4 billion included loans which were held for sale to NAMA. Excluding loan losses, the bank's operating profits fell by 28% to just over €1 billion.
In a separate statement, the bank said it believed it could raise much of the €2.7 billion in new funding it needs from private sources, including existing shareholders.
The bank said it had been working with a syndicate of international banks on its plans to raise capital, and expected to make a further announcement after it had finished talks with the EU on its restructuring plan.
BoI chief executive Richie Boucher said the bank had a plan in place to raise the money it needed. He said talks with the EU were proceeding satisfactorily. Mr Boucher said he did not see the State becoming any more than a minority shareholder in the bank under its current plans. He said Ireland was still a potentially profitable market, and that the bank's loan losses had peaked.
Mr Boucher said there had to be an improvement in margins, as funding costs remained high. Asked about the prospect of higher mortgage rates for customers, he said some of BoI's lending products were unprofitable, and interest rates for these would have to be addressed 'in the near-term'.
Mr Boucher said the bank had lent €3 billion in the past year to small businesses, and he believed the bank could meet the new €3 billion target for small business lending set by the Finance Minister yesterday.
He said the bank believed the Irish economy had stabilised, though 2010 would still be a difficult year.
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CURRENCIES - The euro is trading at $1.3410 and 88.91p sterling.
