Bank of Ireland said it has executed a credit risk transfer transaction which will improve its regulatory and fully loaded CET1 capital ratios by about 30 basis points.

Common Equity Tier 1 is the core measure of a bank's financial strength from a regulator's point of view.

The bank said the deal includes a portfolio of about €1.4 billion of Irish mortgages and involves the execution of credit protection agreements which reduces its credit risk exposure through a risk sharing structure.

This sees the investors assume the credit risk for about €265m of potential credit losses on the reference portfolio of Irish mortgages for an initial annual coupon of roughly €12m.

Bank of Ireland said today's transaction forms part of the range of balance sheet optimisation initiatives it previously indicated were being progressed during the second half of this year.

It results in a pro-forma reduction in the average risk weight of the bank's Irish mortgage portfolio as at June this year from about 26% to about 22%.

The bank said there is no customer impact from today's transaction.

"No assets will be derecognised from the group balance sheet and the reference portfolio of loan assets and related customer relationships will continue to be managed by the group," Bank of Ireland added.