(Alliance News) - Bank of Ireland Group PLC said Tuesday it has completed a credit risk transfer, improving its CET1 ratio by about 30 basis points.
"The transaction references a portfolio of about EUR1.4 billion of Irish mortgages and involves the execution of credit protection agreements which reduce the group's credit risk exposure through a risk sharing structure, whereby the investors assume the credit risk for about EUR265 million of potential credit losses on the reference portfolio of Irish mortgages for an initial annual coupon of about EUR12 million," the lender explained.
Bank of Ireland said the deal is part of its strategy to "optimise" its balance sheet and reduces the average risk weight of its Irish mortgage portfolio at the end of June to about 22% from about 26%.
Bank of Ireland ended the half with a regulatory CET1 ratio of 15.3%, improved from 14.9% in December.
The bank added: "There is no customer impact from the transaction. No assets will be derecognised from the group balance sheet and the reference portfolio of loan assets and related customer relationships will continue to be managed by the group."
Shares in Bank of Ireland were 0.9% higher in London on Tuesday at EUR5.30 each.
By Paul McGowan; paulmcgowan@alliancenews.com
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Bank Of Ireland (BIRG)