Bank of Ireland under intense pressure

Ireland's premier bank, Bank of Ireland, has warned it is facing a squeeze on profit margins in addition to the huge impairment charges it will take this year and next. "Demand for new lending remains muted and the lower interest rate environment together with the impact on deposit pricing of more intense competition has resulted in pressure on liability spreads," it said in a trading update."This trend together with higher wholesale funding costs are having a significant negative impact on net interest margin." Like the rest of the financial sector in Ireland, the bank is suffering in one of the worst economic crises ever faced by the country.Today, it reiterated it expects impairment charges on loans of circa €6bn in the 3 year period to March 2011, including €1.4bn taken last year.