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LONDON (Alliance News) - Bank of Ireland Group PLC on Monday reported a drop in annual profit as the lender's income decreased, but it has still boosted its annual payout.
Shares in the Dublin-headquartered lender were down 5.2% in early trading Monday at EUR4.96 each.
In 2018, Bank of Ireland's pretax profit decreased 2.0% to EUR835 million from the EUR852 million in 2017.
The lender's net interest income decreased 4.4% to EUR2.15 billion from EUR2.25 billion. Bank of Ireland attributed the decrease on lower "liquid asset yields" due to bond sales, the impact of the "ongoing low-interest rate environment" and the reclassification of Irish National Asset Management Agency subordinated debt due to the introduction of IFRS 9.
The Retail Ireland unit registered a 7.0% decrease in income to EUR267 million but the bank's Wealth & Insurance unit reported 21% growth to EUR250 million.
Bank of Ireland increased its total dividend by 39% to 16 euro cents from the 11.5 cents distributed in 2017.
"The group has made good progress in 2018 and is delivering against the strategic targets for growth and transformation we have set out for 2021," said Chief Executive Francesca McDonagh.
Bank of Ireland's net interest margin at the end of 2018 decreased to 2.20% from 2.29% the year prior. The bank's fully loaded CET1 ratio ended 2018 at 13.4% compared to 13.8% the year prior.
Bank of Ireland's operating expenses decreased 2.5% to EUR1.95 billion from EUR2.00 billion in 2017.
In 2018, the bank had net lending of EUR1.3 billion with EUR15.9 billion new lending, a 13% increase on 2017. The lender had new Irish mortgage growth of 17%.
Bank of Ireland's non-performing loans decreased 24% in the period.
The bank's loans & advances to customers in 2018 reached EUR77 billion, up from EUR76 billion in 2017. Bank of Ireland's customer deposits increased to EUR79 billion from EUR76 billion.
Looking ahead, Bank of Ireland expects further net lending growth in 2019 while maintaining "commercial discipline on risk and pricing".
The lender expects its net interest margin to be about 2.16% in 2019. Bank of Ireland also expects its operating expenses to reduce further.