Bank of Ireland profit falls 31% amid impairment charge as tariffs weigh
Still, the bank marginally increased its full-year net interest income forecast and maintained its medium-term financial targets.
Bank of Ireland's net profit fell to €608 million in the first half, it said in a statement on Tuesday.
While its net interest income declined to €1.67 billion from €1.8 billion for the same period last year, the result was better than the company had expected, it said.
READ MORE
The lender hiked its net impairment losses to €137 million from €50 million, driven by an increase in 'loan loss experience' and as management took a €40 million general provision to reflect 'the evolving macroeconomic outlook'.
While Bank of Ireland's economists upgraded their Irish economic forecasts in recent weeks, this was caveated on the EU reaching a trade deal with the US that wouild leave tariffs on most Irish goods at 10 per cent. However, an accord reached over the weekend will see a 15 per cent tariff apply to most imports from the EU.
Looking ahead, the bank now sees its net interest income coming in at €3.3 billion, up marginally from €3.25 billion previously forecast. It reported €3.56 billion of net interest income last year in a higher interest rate environment.
It continues to expect its so-called business income – including income from its New Ireland life business, Davy, and shares of joint ventures – to expected to rise 5 per cent.
'The group had a good first half performance,' said chief executive Myles O'Grady. 'Against an uncertain international backdrop, the Irish economy is resilient. Bank of Ireland is well positioned to navigate this environment, generating strong levels of capital to support customers, grow our balance sheet, invest in the business and deliver attractive shareholder returns.'
Bank of Ireland reaffirmed its full-year guidance of delivering net profit equivalent to about 15 per cent of shareholders' tangible equity in the business.
Having recommenced interim ordinary dividends in 2024, the bank announced that it will pay an interim dividend of €243 million on its result for the first half.
Since the start of 2023 the group has returned €2.6 billion to shareholders through a series of buybacks and dividends, it noted.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Journal
21 minutes ago
- The Journal
Fracked gas could enter Ireland's energy supplies as EU promises US billions in 'energy cooperation'
INCREASED IMPORTS OF liquefied natural gas (LNG) from the US, including harmful fracked gas, could enter Ireland's energy supplies after the EU promised to spend billions of euro on 'energy cooperation' with Trump as part of the tariffs trade deal. European Commission President Ursula von der Leyen and US President Donald Trump met in Scotland over the weekend to strike a trade deal in the wake of Trump imposing tariffs on the EU. In addition to agreeing on a new 15% tariff rate for EU exports to the US, the EU has promised to spend around €650bn on LNG, oil and nuclear fuels from the US over the next three years. Climate activists have said it is a step backwards for Europe in its efforts to switch to renewables and reduce greenhouse gas emissions that are causing climate change. In a statement after the deal was struck with Trump, von der Leyen said: 'We will increase our energy cooperation. Purchases of US energy products will diversify our sources of supply and contribute to Europe's energy security.' 'We will replace Russian gas and oil with significant purchases of US LNG, oil and nuclear fuels,' she said. The White House said that the EU agreed 'to purchase $750bn [€650bn] in US energy' by 2028. Advertisement Von der Leyen and Trump speaking to media on Sunday after meeting in Scotland. Alamy Stock Photo Alamy Stock Photo Trump's stance on energy policy has been to remove supports for renewable energy developments and incentivise fossil fuel projects, which he lauds for their financial prospects despite having a massively negative impact on the planet. That has spanned oil, coal, and gas, including fracked gas, a method of extraction that is even worse for the environment and human health than more conventional drilling methods. The Journal asked the Department of Climate if the energy aspect of the trade deal could mean that Ireland could end up with more US fossil fuel imports in its energy mix – either inadvertently through interconnection with the continent, or deliberately through planned LNG infrastructure called a Floating Storage and Regasification Unit (FSRU) that received approval on 4 March . A spokesperson for the department said the FSRU 'is likely to be leased, subject to an open market competition' and that 'the contract for replenishing of the FSRU with LNG will also be an open market procurement'. The spokesperson noted that the government's decision to approve the FSRU also brought about the end of a previous government policy which had banned the direct importation of fracked gas. 'Any application for fossil fuel infrastructure in Ireland will be subject to the planning, consenting and regulatory approvals by relevant bodies and the provision of the Climate Act 2015-2021 will apply. In line with EU and National Legislation, there is no specific prohibition on fracked gas over other forms of fossil fuel – a level playing field applies,' the spokesperson said. 'Bad news for the planet' The Green Party has criticised the EU's acceptance of the energy clause slotted into the trade deal. The party's European affairs spokesperson and former MEP Ciarán Cuffe said that averting the trade war came at a 'heavy cost'. 'It will lock the European Union into buying vast amounts of oil and fracked gas from the United States. This is bad news for the planet and may derail the EU's climate targets in the coming years,' Cuffe warned. 'US President Trump's views on climate contradict what we know about our warming world and will have heavy consequences in years to come,' he said. Related Reads Environmental activist shot dead in Peru over work to save Amazon rainforest Countries causing climate crisis could be ordered to pay reparations to victims Councillor Janet Horner described the move to grow spending on fossil fuels as 'immoral, short-sighted and deeply damaging'. Horner said the 'outrageously high target is a move in the total wrong direction given the urgency of moving away from fossil fuel'. She added that Europe's long term energy security 'lies in low-carbon fuels such as wind and solar' but that these are 'being directly attacked by the US administration'. 'It is a betrayal of all who are working tirelessly to secure a climate stable future that von der Leyen, on behalf the EU, has offered this up on the chopping block of the negotiations.' Shay O'Reilly, a spokesperson for Beyond Fossil Fuels, a coalition of groups campaigning for decarbonisation, told The Journal that 'the past few years of energy crisis has shown that relying on fossil gas imports remains far riskier for the EU than investing in homegrown renewables'. O'Reilly said the EU-US deal 'opens the door for countries and utilities to lock in more US gas', which risks 'undermining Europe's push for energy independence'. 'True energy security lies in building a resilient domestic grid powered by renewables, not doubling down on foreign gas,' he said. Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. Learn More Support The Journal
Irish Times
2 hours ago
- Irish Times
Ireland gets energy warning and should you buying a home if you aren't married
Ireland's ambition to become a big net exporter of renewable electricity 'risks being undermined unless policymakers act swiftly to address cost competitiveness challenges', the National Economic and Social Council has warned the Government. Kevin O'Sullivan has the story , and also breaks down what the reports mean for Ireland. It's more popular than ever, but is buying a home with your other half when you aren't married the right move for you? Joanne Hunt breaks down what is at stake in Money Matters. Given the amount of trade news in recent days, it is understandable that the EU's mammoth budget has moved somewhat under the radar. Martin Sandbu goes through the detail to show the good, the bad and ugly of the bloc's spending plan. Kevin also reports that progress in Ireland's transition to clean energy is insufficient to meet key energy targets with 'widening investment and delivery gaps', an assessment of trends up to 2050 concludes. The report by energy analysts Wood Mackenzie, in collaboration with the energy company Pinergy, concludes Ireland could become a net exporter of electricity as early as 2030, enabled by offshore wind and new interconnectors. READ MORE It's earnings season, and we got our first look at the big banks, with Bank of Ireland reporting a 31 per cent drop in net profit for the first half of the year and higher than expected provisions for bad loans. The shares fell, with CEO Myles O'Grady set to cut 260 jobs next year. Joe Brennan has the details, and analyses why the market turned off the bank after the earnings. The median price of homes in Ireland has risen by 9.5 per cent in the past year, according to a home valuation firm's report. The Geowox Housing Market Report for the second quarter of the year found the median average price for an Irish home rose to €370,000 after a €32,000 rise in the same period in 2024. Hugh Dooley has the story. The High Court has confirmed a Central Bank inquiry decision fining Irish Nationwide Building Society's former finance director John Stanley Purcell €130,000 for his role in regulatory breaches at the lender before its collapse during the financial crisis. Mary Carolan reports. A forensic investigation into loans from Fade Street Social restaurant company, which is in examinership, to three companies in which Dylan McGrath was a director and two of which Vincent Melinn had been a director, has been conducted by staff at recovery specialists Azets. Details emerged as the examiner to the business successfully applied for more time to save the restaurant. The International Monetary Fund has upgraded its growth forecast for the euro zone on the back of a 'strong GDP out-turn in Ireland'. As Eoin Burke-Kennedy reports, in its latest assessment of global economic conditions, the Washington-based institution said it expected growth in the euro zone to accelerate to 1 per cent in 2025 and 1.2 per cent in 2026. A senior Dublin-based manager with Twitter who was deemed by the company to have resigned when he failed to sign up to the new 'hard-core' work environment set out by Elon Musk had, in fact, availed of an 'enhanced opportunity' to depart with severance pay, the company has told the Labour Court. Emmet Malone was there. A former employee of popular Dublin ice cream parlour Spilt Milk, who said she quit after months of sexual harassment from a colleague a decade her senior, has secured €5,000 in compensation. If you'd like to read more about the issues that affect your finances try signing up to On the Money , the weekly newsletter from our personal finance team, which will be issued every Friday to Irish Times subscribers.
Irish Times
3 hours ago
- Irish Times
Irish renewable energy policy gets a badly needed reality check
The hype around Ireland's vast amount of potential offshore renewable energy and ambition to become an energy exporting country needed a hard reality check. It has come in a series of reports to the Government from the National Economic & Social Council on what fulfilling that national aspiration entails beyond supporting policy. Repeated political declarations of wanting to scale up renewable electricity – 40 gigawatts plus, many times current power demand – were too easily trotted out by governments getting uneasy about the climate threat on our doorstep and multibillion euro fines becoming more likely no matter how you divide up the carbon cake. The first report published in April concluded Ireland's transition to a clean energy economy risks heading into 'strategic fog' with a lack of clarity and certainty about future reliability of the country's energy supply. READ MORE The second and third were published on Wednesday. The former concluded that cost-competitiveness challenges left unaddressed would make it impossible for the State to become a renewables exporter. The issue is summed up by the observation that with 'approximately 50 per cent of Ireland's electricity produced from gas-fired power plants, [it] made Irish electricity prices the most exposed in Europe to resulting regional gas market volatility'. [ Scrapped Amazon plant a sign of Ireland hitting the infrastructural buffers Opens in new window ] There is increasing vulnerability from 'fossil fuel import dependency', while our subsea gas pipelines and power interconnectors could become the target of malign actors. The latter underlines the need for anticipation of needs and likely demand with an inevitable supply chain crunch, not helped by profound upheaval in global trade, over-reliance on China and lack of EU manufacturing capacity. The international supply chain for wind technologies highlights our exposure to emerging bottlenecks with turbine components; critical raw materials, offshore substations and installation vessels. Meanwhile, ports are not fit for purpose – not to mention planning and permitting procedures. These reports are not killing the dream of energy independence; a shift away from the most expensive electricity in Europe and an end to price volatility. They chart a way through the minefields. In particular, 'Ireland's energy strategy must adapt to the reality that strategic trade dependencies will not cease but will instead take new forms', whether it's buying our renewables or co-operating on enhanced grid connectivity. Furthermore, risk of geopolitical tensions affecting key oil and gas 'transit chokepoints' is increasing. It threatens the security of our energy supply, especially with reliance on gas supplies from the UK and crude oil from the US – after the putative tariff agreement between Trump and the EU this week, American LNG can be added to that list. The case for getting off fossil fuels couldn't be clearer, and the NESC reports are grounds for conditional optimism. With more than ample offshore resources and the correct strategic approach, we can become a clean energy exporter. Notwithstanding current uncertainties and high costs, Ireland could break into an international green hydrogen market, generating the fuel using offshore wind, provided strategic partnerships are formed with countries requiring large quantities of the fuel. [ Taoiseach to 'delve into' Amazon's scrapping of Dublin plant over failure to secure power supply Opens in new window ] Taoiseach Micheál Martin this week convened a meeting of industry leaders and Government officials to address the challenge of accelerating offshore wind delivery. He knows there is a growing risk of Ireland falling behind in the energy transition and implications this has for the country as a place to do business amid a data/AI revolution. We must acknowledge the challenges honestly, he underlined, and 'work together to expedite the development of a sector that will be central to Ireland's economic and energy future'. These NESC reports and on-the-ground know-how can help deliver the required push-through.
