Bank of Ireland (BoI) the only one of Ireland’s six banks to avoid nationalisation, on Monday reported it returned to net profit in 2011 thanks to heavy debt restructuring in the face of continued losses from dud loans.
Bank of Ireland said it netted £40 million ($52.8 million) in profit thanks in part to a £230 million tax refund. The Dublin-based bank recorded a net loss of £609 million in 2010.
It is the first Irish bank to record a net profit of any kind since Ireland’s long-booming economy came crashing down in 2009 amid a burst property bubble.
Bank of Ireland underscored its funding strength versus its two surviving domestic rivals, state-owned Allied Irish Banks and Irish Life & Permanent. Its deposits increased 9 percent to £71 billion, chiefly at the bank’s British division, while its reliance on short-term liquidity loans from the European and Irish central banks fell 29 per cent to 22 billion.
Operating costs fell 8 per cent to £1.65 billion as the bank reduced staff and pension benefits. More staff cuts loom this year.
The bank continued to record massive losses from writing off property-based loans, but took the worst of its medicine in 2010.
It reported more than £1.9 billion in 2011 loan writeoffs to customers, 4 percent more than in 2010, with an increasing focus on residential mortgages.