Net loss slashed at Bank of Ireland

The underlying loss before tax at struggling Irish lender Bank of Ireland widened in 2010, as the company booked a €2.24bn loss on the sale of assets to the National Asset Management Agency (NAMA), the so-called "bad bank" set up by the Irish government.The underlying loss before tax expanded to €3.46bn in 2010 from €2.97bn in 2009. The reported loss before tax virtually halved to €950m from €1,813m the year before.Net loss after tax was a much better than expected €609m, compared with a loss the year before of €1,760m.The bank made an operating profit before impairment charges on financial assets and loss on sale of assets to NAMA of €1,017m, down from €1,056m in 2009.The bank, which is 36% owned by the Irish tax-payer, said it made progress against its key priorities but continued to be weighed down by the severity of the economic downturn in Ireland and the nation's sovereign debt tribulations."Losses on disposal of assets to NAMA have been higher than our expectations and those anticipated by the Minister for Finance in September 2010 with respect to Bank of Ireland. Impairment provisions on our non NAMA portfolios remain high but within our expectations and we continue to be of the view that losses on our non NAMA portfolios peaked in 2009 and having reduced in 2010 will reduce further in 2011 and 2012," said bank chairman, Patrick Molloy.At 31 December 2010, the group's Equity tier 1, Core tier 1, Tier 1 and Total Capital Ratios were 7.3%, 9.7%, 9.7% and 11.0% respectively. The Equity tier 1 and Core tier 1 ratios both improved compared to 31 December 2009 (5.3% and 8.9% respectively) while the Total tier 1 and Total capital ratios reduced compared to 31 December 2009 (9.8% and 13.4% respectively). The differing trends reflect reduced subordinated debt capital after the liability management initiatives."Trading conditions in the first months of 2011 remain challenging due to higher funding costs, in particular the cost of customer deposits, and the continuing difficult liquidity environment," said group chief executive, Richie Boucher.---jh