* Shares set for best day in nine months
* Records first half impairment charge of just 1 mln euros
* Dividends under consideration at FY
(Adds share price, comments on shareholder distributions)
By Padraic Halpin
DUBLIN, Aug 3 (Reuters) - Bank of Ireland on
Tuesday said first-half profit bounced back to 2019 levels as it
put COVID-19 disruption firmly behind it with higher revenues,
further cost cuts and barely any fresh bad loans.
Shares in Ireland's largest bank by assets were set for
their best day since November, up 7.5% at 4.8 euros by 1320 GMT
and 9% ahead of the price they were trading at before the
government announced in June that it planned to sell down part
of its 13.9% shareholding by the end of the year.
The lender said it had recorded a 465 million euro ($551.86
million) profit in the first six months of 2021. That compared
to a loss of 669 million euros before tax in the same period a
year ago, although the 2020 full year loss was eventually around
half that as lending and income recovered in the second half.
While its main Irish market was in its third and longest
lockdown for much of the first half of this year, the bank set
aside just 1 million euros to cover possible loan defaults
compared to 937 million euros in the first half of 2020.
On a pre-impairment basis, underlying operating profit was
7% higher than 2019 levels, before the pandemic struck.
"Our results today, and our outlook for the future, are
radically different to 12 months ago," Chief Executive Francesca
McDonagh said in a statement.
Reflecting the "increasingly positive" outlook, total income
in the second half is expected to be 5% higher than the first,
the bank said, with annual costs set to fall below 1.65 billion
euros this year from 1.72 billion in 2020 and to 1.5 billion by
2023.
McDonagh said the board would discuss resuming shareholder
distributions at its full year results. Chief Financial Officer
Myles O'Grady told Reuters there was also scope to write back
some provisions on pandemic-related bad loans.
Analysts at Davy Stockbrokers, which Bank of Ireland is set
to acquire in 2022, said it would likely materially upgrade its
full year forecasts for the bank as a result of the better than
expected results and improved outlook.
($1 = 0.8426 euros)
(Reporting by Padraic Halpin; Editing by Kirsten Donovan and
Mike Harrison)