Bank of Ireland has put in a strong full-year performance, posting an 18 per cent increase in pre-tax profits to #1.08 billion (£850 million). Irish retail banking and treasury businesses, including Davy Stockbrokers, boosted profits in the 12 months to the end of March. The figures were in line with market expectations.
The bank, which has been implementing a restructuring plan to cut costs, will continue to close branches. So far, 18 have closed, mainly in urban areas. Sixty-two are due to close by 2003, including some rural branches.
The bank's retail banking chief executive, Mr Des Crowley, said it would not leave any town in rural Ireland without a banking service. "We don't intend to exit rural Ireland," he said.
Bank of Ireland is working with the Government on the National Payments Strategy to allow distribution of financial services products through An Post. It would also look to increase the number of shops and other retail outlets which accept laser card payments and would increase the number of automated cash machines for customers, he said.
Bank of Ireland shares closed 12 cents lower at #10.88 in Dublin yesterday. The shares have traded heavily in the past few days, with investors taking profits ahead of the full-year figures.
Earnings per share rose by 22 per cent to 83.1 cents. Shareholders will be paid a dividend of 29 cents per share, up 23 per cent on 2000, on the back of the strong performance.
Bank of Ireland chief executive Mr Maurice Keane said the bank had achieved its "best expectations" in terms of profit growth and was confident about the future. "While there is clearly some softening in the Irish economy, we share the view that growth will continue at very respectable and, indeed, much more sustainable levels in the medium term," he said.
The profits exclude the #93 million cost of the bank's transformation programme and the #35 million DIRT settlement with the Revenue Commissioners.
Some 58 per cent of the group's profits were earned in the Republic. Profits from its retail banking business grew by 27 per cent to #290 million. Corporate banking and treasury operations achieved an exceptionally strong performance, with profits up 31 per cent to #368 million, mainly due to large dealing profits.
The bank profited from positions taken in the currency markets during the year while business at its corporate banking and at Davy Stockbrokers was also very strong.
Mr Brian Goggin, chief executive of the bank's corporate and treasury division, said this rate of growth would not be repeated, but that it would continue to achieve profit growth at a steady level going forward.
Sales of life and pensions products also made a large contribution. Profits increased 22 per cent to #131 million during the year in this division. Asset and wealth management delivered a 14 per cent rise in profits to #147 million. Profits from the Bristol & West subsidiary in Britain were up 6 per cent to #228 million. The UK, where the bank has been investing in new acquisitions, Chase de Vere and MoneyXtra, accounted for 25 per cent of profits.
Its international activities, which include its banking business at the International Financial Services Centre, brought in a further 17 per cent of profits.
