The Governor and Company of the Bank of Ireland (The Bank of Ireland)
Interim Management Statement
24 April 2013
Reflecting the actions taken by the Group, the positive momentum in re-building the Group's net interest margin reported for the second half of 2012 is continuing into the early months of 2013.
The Group welcomed the expiry of the exceptional Eligible Liabilities Guarantee Scheme (ELG) on 28 March 2013. We were prepared for the expiry of the ELG and have not experienced any adverse impacts on our deposit volumes since the expiry of the scheme. It remains our expectation that the cost of ELG will reduce quickly, thereby positively impacting on the Group's income.
Management of operating costs remains a key priority. As expected the cost reduction impact of the departure of 1,200 staff during the second half of 2012, together with the continuation of these redundancy programmes is being reflected in our staff costs. As anticipated when we announced our financial results for 2012, pension costs have increased due to the change in accounting rules that took effect in 2013 and the current size of the deficit in the Groups sponsored Defined Benefit Pension Schemes. Engagement with key stakeholders on the potential options in relation to mitigating the deficit continues.
Our diverse loan portfolios, including those relating to our Irish Mortgage and SME customers, continue to perform in line with expectations and we are continuing to make steady progress in the provision of appropriate restructuring arrangements to co-operating customers who have difficulties meeting contracted loan repayments.
We continue to expect that impairment charges will reduce from the current elevated levels trending over time to a more normalised impairment charge as the Irish economy recovers.
Balance Sheet Update
Customer deposits have remained stable and on a constant currency basis are in line with the EUR75 billion reported at 31 December 2012. The Group has now achieved its "steady state" loan volume target of EUR90 billion and this, together with the aforementioned performance of our deposit volumes, has resulted in our achieving our targeted Loan to Deposit ratio of 120% ahead of time.
Reflecting the usage of funds from loan redemptions and transfers, the termination of the EUR3 billion IBRC Repo Transaction and a EUR1 billion repayment of drawings under the ECB's Long Term Refinancing Operation (LTRO), wholesale funding has reduced by EUR6 billion from 31 December 2012 to EUR33 billion currently. All of the Group's Monetary Authority drawings are under the LTRO and since 31 December 2012 have reduced to EUR11 billion of which EUR4.4 billion relates to NAMA Bonds.
In March 2013 the Group issued EUR500 million of Irish Mortgage Asset Covered Securities with a 5 year maturity as we continue to
We are overdue to get into the 20's with this stock. We don't need the waters muddied with a reverse split of the 'home' share which is affordable to punters who have had one heck of a recession. In due course there shall be - sooner rather than later is my prayer - a 'demand pull' from the US exchanges, allowing external forces to propel the share. Ritchie n co have factored this concept in by the opposite to a reverse split on the ADR; the Directors ordered the value of the ADR - prob more than a year ago - be changed from an exchange of 1 ADR to 4 home shares, to 1 ADR to 40 home shares. Not wishing to bore you, but my belief is, that when the ADR hits $10 US dollars, you and. I and our blog Board, are in business. The ADR closed today at about USD9.16.!
are not very positive for stocks at all times. some years ago, Citibank went through a reverse stock split and after several months had fallen 30% +, it took several years to recover. reverse stock splits should not be done until a company has cleaned out their problems, and is definitely profitable and going to pay a dividend. Better than a reverse stock split is to have the company buy back as much excess stock in the market possible. What is important for BOI and AIB stock are 1) interest spread earned on loans; 2) reduce in 1/2 the delinquency rate of mortgages - from say 12% to 6% , 7%; 3) reduce write-offs to a minimal amount. those 3 moves = long term profitability and eventually a dividend. after they reach this goal they can think of reverse stock splits. in any other condition reverse stock splits would be a smoke and mirrors game....
Would be great to see 0.1740 re-tested and broke through, Seems Investors piling in ahead of tomorrows AGM in anticipation of positive news, sure hope Boucher will deliver, even mention of buyback or future divs 2014-2015 would keep positive momentum intact. IF 0.1740 resistance taken out i make next resistance @19c however we getting closer to end of Q1 earnings.
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