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(Alliance News) - Bank of Ireland Group PLC on Monday posted a sharp fall in profit for the first half of the year but said it made "continued progress" towards its objective of cutting costs and increasing loan book by 2021.
In the six months to June 30, the company posted pretax profit of EUR315.0 million, down 31% year-on-year from EUR454.0 million. The bank's fully loaded capital ratio increased by 40 basis points to 13.6%.
The company net interest income fell to EUR1.07 billion from EUR1.08 billion and net interest margin fell to 2.16% from 2.23%. The bank said it expects its net interest margin to fall further in financial 2019.
The company's Irish mortgage business saw EUR1.00 billion worth of new residential mortgage lending and had a market share of 23%, Bank of Ireland said.
Elsewhere in its Ireland division, the company's corporate bank had net lending revenue of EUR400.0 million and wealth & insurance sector had a 3% year-on-year income growth. It also launched a EUR2.00 billion fund to assist its business clients with Brexit preparations.
Its International Acquisition Finance unit had a net loan increase of EUR400.0 million at the end of the first half and its UK corporate banking business had net lending of EUR300.0 million.
The group's operating expenses, before levies and regulatory charges, fell 3% to EUR903.0 million during the period from EUR933.0 million, with cost-cutting a key part of its strategic plan that it unveiled last year.
Bank of Ireland's total business restructuring costs during the period totaled EUR138.0 million, in line with its expectations. As part of the so-called business transformation plan, the company in June 2018 said it would aim to increase its loan book by 20% and reduce cost base to EUR1.70 billion by 2021.
Bank of Ireland on Monday outlined that it expects dividends to increase on a "progressive basis" and aims for a dividend accrual of EUR100.0 million. This would be equal to 18.5 cents per share.
Chief Executive Francesca McDonagh said: "The group has made continued progress in 2019 to deliver against our strategic priorities of growth and transformation. We have made good progress in delivering on this plan. In particular we are growing our loan book while maintaining our risk and commercial discipline, are reducing our costs and are making tangible progress in the delivery of our UK strategy, focused on increasing returns"
Shares in Bank of Ireland were down 2.3% at EUR4.16 each in London on Monday morning.