BKIR.L Regulatory News (BKIR)

27 Sep 2005 07:00

Bank of Ireland(Governor&Co)27 September 2005 International Financial Reporting Standards (IFRS) IFRS Transition Report Explanatory Note September 2005 Background • The IASB created a single set of International Financial Reporting Standards (IFRS). • In June 2002 the EU Regulation requiring that by 1 January 2005 the consolidated accounts of all EU listed companies conform to these standards. The aim: • global accounting standards.• transparent and comparable information in financial statements.• to help the various capital markets to make economic decisions.• a single set of high quality financial statements. IFRS Timeline for Bank of Ireland Group Annual Accounts Half-year Accounts Annual Accounts 31 March 2005 30 September 2005 31 March 2006Prepared under Irish GAAP Prepared under IFRS with 30 September First full IFRS Accounts with 31 March 2004 comparatives restated to IFRS, 2005 comparatives restated to IFRS, where appropriate where appropriate March 2005 comparatives, restated to IFRS where appropriate, issued with transition statement IFRS Profit Impact as at September 2004 IFRS Comparative income statement for September 2004 Irish IFRS IFRS Proforma IFRS GAAP Impact Impact Proforma •m •m •m •m •mNet interest income 922 19 941 21 962Other operating income 628 903 1,531 (529) 1,002Insurance net claims - (875) (875) 480 (395)Total operating income net of insurance claims 1,550 47 1,597 (28) 1,569Operating expenses (875) (53) (928) (5) (933)Impairment losses on loans and advances (28) - (28) 0 (28)Income from associated undertakings and joint ventures 29 (10) 19 0 19Profit before taxation and exceptional items 676 (16) 660 (33) 627Exceptional Items 37 - 37 - 37Profit before taxation 713 (16) 697 (33) 664Taxation (120) (1) (121) 3 (118)Profit for the period 593 (17) 576 (30) 546 584 567 539 Basic EPS 62.0 60.2 57.2Underlying EPS 57.5* 54.9** 51.9** * Adjusted for exceptional item of €37m, own shares held for benefit of life assurance policyholders & goodwill amortisation** Adjusted for exceptional item of €37m, own shares held for benefit of lifeassurance policyholders Impact on balance sheet at 30th September 2004 • Balance sheet increased by €1.2bn from €116.3bn to €117.5bn • Major impacts:- o Consolidation of SPE's and other entities of €1.2bn o Line-by-line consolidation of the life assurance business o Impact of pension on reserves of €496m IFRS impact on capital ratios 31-Mar-05 1-Apr-05 IR GAAP IFRS Tier 1 Capital €5740m €6,020m Total Capital €8,059m €8,243m Risk Weighted Assets €75,892m €75,886m Tier 1 Capital Ratio 7.6% 7.9% Total Capital Ratio 10.6% 10.9% IFRS Profit Impact as at March 2005 IFRS Comparative income statement for March 2005 Irish IFRS IFRS Proforma IFRS GAAP Impact Impact Proforma •m •m •m •m •mNet interest income 1,898 33 1,931 40 1,971Other operating income 1,275 2,302 3,577 (1,204) 2,373Insurance net claims - (2,222) (2,222) 1,082 (1,140)Total operating income net of insurance claims 3,173 113 3,286 (82) 3,204Operating expenses (1,807) (108) (1,915) (8) (1,923)Impairment losses on loans and advances (79) - (79) - (79)Income from associated undertakings and joint ventures 46 (16) 30 - 30Profit before taxation and exceptional items 1,333 (11) 1,322 (90) 1,232Exceptional Items (12) - (12) - (12)Profit before taxation 1,321 (11) 1,310 (90) 1,220Taxation (241) (15) (256) 19 (237)Profit for the period 1,080 (26) 1,054 (71) 983 1,073 1,047 979 Basic EPS (average number of shares 942m) 113.9 111.1 103.9Underlying EPS (average number of shares 966m) 114.2* 109.6** 102.3** * Adjusted for exceptional item of( €12m), own shares held for benefit of life assurance policyholders & goodwill amortisation** Adjusted for exceptional item of (€12m), own shares held for benefit of lifeassurance policyholders Summary • No change to business fundamentals of cash-flows, issue is timing through the profit & loss account. • No change to the Group's risk management policies, Group will continue to hedge on an economic basis and this may introduce volatility into the profit and loss account. • Earnings volatility and changing interpretation of some accounting standards will present challenges. This information is provided by RNS The company news service from the London Stock Exchange