KBC Ireland takeover subject to further talks as BOI reports ‘stable’ start to 2021

Bank of Ireland has reported a stable start to the year

Ellie Donnelly Twitter Email

April 30 2021 07:36 AM

Bank of Ireland said its plan to takeover KBC Ireland remains subject to further negotiation and agreement of final terms, due diligence, as well as obtaining regulatory approvals.

In a trading update Bank of Ireland said net interest income was stronger than expected, with performance “stable” in the three months to end-March. Net interest income is the difference between a bank’s revenues and expenses.

The performance reflected higher corporate lending volumes, higher UK mortgage margins and the increased application of negative interest rates on certain deposits. The low interest rate environment continues to negatively impact income on liquid assets and structural hedges, the bank said.

In the three month period the bank reported new lending of €3.9bn, which was offset by €3.9bn of redemptions.

Overall, customer loan volumes were €78.5bn at the end of March, an increase of €1.9bn since December 2020.

The bank said “modest reductions” in net lending in Irish and UK retail have been offset by growth in corporate lending.

New mortgage lending in Ireland of €500m in the three months to end-March remained “robust.”

Business income was “in-line with expectations”, supported by growth in the bank’s Wealth and Insurance divisions.

Bank of Ireland reported a net reduction in costs of 7pc in the three months to end-March versus the prior year.

Francesca McDonagh, Bank of Ireland CEO, said: “The operating environment for European banks, including in Ireland, is clearly dynamic and changing. We will consider opportunities that are a good fit for customers, complement our strategy to grow our business in Ireland, and support the investments we are making in the bank."

“Looking to the months ahead, especially in our home market of Ireland, our clear ambition is to proactively support economic recovery through accessible, responsible and sustainable lending."