Bank of Ireland’s losses less than expected

| April 14, 2011 | 0 Comments

The Bank of Ireland has today reported its losses narrowed - surprising analysts.

The country’s biggest lender said net losses for 2010 totalled €609 million (£5.44 million) - analysts had expected at least double due to the problems in Ireland’s banking sector.

The bank performed well under recent stress tests and its shares were up almost 4% in mid-morning trading today.

The latest stress tests were deemed necessary after last year’s tests failed to reveal the weakness among banks in Ireland.

The bank is seeking to raise €4.2 billion in the next few months via overseas investors in order to avoid Government control.

At the onset of the credit crunch, Ireland’s banking system came close to meltdown after the slump in the country’s property market resulted in a fall in the value of investments linked to it.

Meanwhile, the Bank of Ireland said bad debt write-offs were lower than in 2009, although mortgage arrears had risen.

According to the bank, 4.2% of its Irish mortgages were at least three months in arrears at the end of last year - 2.8% higher than a year earlier.

The results come just a day after Allied Irish Banks (AIB), which was the fourth Irish bank to be nationalised, revealed a loss of €10.16 billion (£9 billion) for the 2010 year, compared with a loss of €2.3 billion the previous year.

Meanwhile, the bank also announced it would axe more than 2,000 jobs in 2011 and 2012 in order to cut costs.

The bank, which is 93% owned by the taxpayer, said business and market conditions remained challenging and it intends to dispose of non-core assets and wind down others.

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