UPDATE 1-Bank of Ireland's FY net loss shrinks
Thu Apr 14, 2011 2:32am EDT
* Net loss shrinks on buyback gains, lower impairments
* Update on capital raising plans in coming weeks
* Deposits have risen since year end
* Repeats impairment charge on non-NAMA loans peaked in 2009
(Adds CEO comments, more detail)
By Carmel Crimmins
DUBLIN, April 14 (Reuters) - Bank of Ireland's (
BKIR.I) net loss shrank by two thirds in 2010, defying market expectations for another blow-out shortfall and burnishing its credentials as the country's least troublesome lender.
Bank of Ireland's loan books had the strongest performance under recent stress tests that put a 70 billion euro price tag on the country's banking crisis, and the lender is confident it can rebound as one of two pillar banks in a slowly recovering economy.
"It's a clean story to understand," Chief Executive Richie Boucher told reporters. "The loan losses, we are comfortable, are coming down. We have had the stress test of all time."
The country's largest bank, with a pedigree that stretches back to 1783, Bank of
Ireland is facing the possibility of majority state control after the central bank said it needed 5.2 billion euros in extra capital to bulletproof itself from future shocks.
The company, in which the government already holds a 36 percent stake, has said it will update the market in coming weeks about its capital-raising plans, and some of its subordinated bonds have risen on speculation it will offer a debt for equity swap.
Boucher declined to comment on the bank's capital strategy.
The rest of the domestic banking sector has been effectively nationalised, with Allied Irish Banks (
ALBK.I), the other pillar bank and Bank of Ireland's main rival, unveiling a 10.4 billion euros loss earlier this week.
Bank of Ireland's net loss of 609 million euros vastly undershot an average 1.9 billion euros shortfall forecast from 11 analysts polled by Reuters I/B/E/S.
The shortfall was capped by a gain of 1.4 billion euros from swapping debt at a discount during the year and a slide in impairment charges by over a third to 1.887 billion euros.
Bank of Ireland reiterated that it expected losses had peaked on loans not destined for a state-run "bad bank".