QUOTE AND NEWS
Reuters  4 hrs ago  Comment 
A subsidiary of Fairfax Financial Holdings , one of the shareholders who helped keep Bank of Ireland out of state hands in 2011, is selling half of its remaining stake in the Irish lender, the bank managing the sale said on Friday.
newratings.com  Dec 2  Comment 
2 December 2016 Pursuant to its obligations under the Transparency (Directive 2004/109/EC) Regulations 2007 ("The Regulations"), Irish Continental Group plc sets out below details of a notification received under The Regulations. Tom...
Clusterstock  Oct 6  Comment 
This story was delivered to BI Intelligence "Fintech Briefing" subscribers. To learn more and subscribe, please click here. The Bank of Ireland plans to invest €500 million ($588 million) in upgrades to its core IT infrastructures over the...
Banking Business Review  Oct 4  Comment 
Temenos confirmed that Bank of Ireland Group has selected UniversalSuite, its front-to-back solution for retail, commercial and corporate banking, to be implemented as Bank of Ireland’s new core banking and channels platform.
newratings.com  Sep 30  Comment 
30 September 2016 Pursuant to its obligations under the Transparency (Directive 2004/109/EC) Regulations 2007 ("The Regulations"), Irish Continental Group plc sets out below details of a notification received under The Regulations. Tom...
Mondo Visione  Sep 30  Comment 
The Board of Supervisors of the European Securities and Markets Authority (ESMA) has appointed new chairs to three of its standing committees: Hannelore Lausch, Executive Director of the Bundesanstalt für Finanzdienstleistungsaufsicht...
newratings.com  Sep 15  Comment 
15 September 2016 Pursuant to its obligations under the Transparency (Directive 2004/109/EC) Regulations 2007 ("The Regulations"), Irish Continental Group plc sets out below details of a notification received under The Regulations. Tom...
newratings.com  Aug 22  Comment 
22 August 2016 Pursuant to its obligations under the Transparency (Directive 2004/109/EC) Regulations 2007 ("The Regulations"), Irish Continental Group plc sets out below details of a notification received under The Regulations. Tom...
newratings.com  Aug 8  Comment 
8 August 2016 Pursuant to its obligations under the Transparency (Directive 2004/109/EC) Regulations 2007 ("The Regulations"), Irish Continental Group plc sets out below details of a notification received under The Regulations. Tom...




 


The Governor and Company of the Bank of Ireland (NYSE: IRE) is one of the largest financial services groups in Ireland. The company conducts its business through 295 full-time retail bank branches, of which 251 were in Ireland and 44 in Northern Ireland. There are no full-service retail bank branches in Britain. Operations in the rest of the world are undertaken by Bank of Ireland Asset Management through offices located in the US, the UK, Australia, Canada and Japan, Corporate Banking through offices located in the UK, France, Germany and the U.S., and Global Markets through offices located in the UK and the U.S.

Retail Republic of Ireland offers a full range of banking services to all major sectors of the Irish economy, including individuals, small and medium-sized commercial businesses, and industrial companies. Bank of Ireland Life offers life assurance, protection, pensions, and investment products to Bank of Ireland customers in Ireland through the extensive branch banking network, as well as the independent intermediary market and a direct sales force. The Capital Markets division provides corporate banking, global markets, asset management, and corporate finance services, principally in Ireland, the UK, Continental Europe, and the US. UK Financial Services brings together all of the BOI's significant activities in the sterling area, including personal lending, business banking, and the sale of banking and insurance products through the UK Post Office.

Bank of Ireland's main competitors are other banks, in particular Allied Irish Banks plc, Ulster Bank Ltd, HBOS plc, National Irish Bank Ltd, Northern Bank Ltd, and Irish Life and Permanent plc.

Company Overview

Business and Financial Metrics

9 months ended December 31, 2009[1]

The Bank of Ireland's underlying operating profit (before impairment charges on loan assets) was €1,050 million for the nine months ended December 31, 2009, down 28% from the comparable nine month period ended December 31, 2008. An impairment charge of €4,055 million on loan assets (of which €2,231 million relates to assets expected to transfer to the National Asset Management Agency (NAMA) and €1,824 million to non-NAMA assets) resulted in the Group recording a loss before tax of €1,813 million and an underlying loss before tax of €2,972 million for the nine months ended December 31, 2009.

Business Segments

IRE operates in four main segments:

Capital Markets (88.0% of FY09 Income)

The Capital markets segment offers global interest rate and asset management products. From FY08 to FY09, Capital Markets operating income increased 11%.

Retail Republic of Ireland (3.7% of FY09 income)

The Retail Republic of Ireland segment offers consumer, business, and private banking to residents of Ireland. From FY08 to FY09, the Retail Republic of Ireland segment operating income decreased 6%.

UK Financial Services (8.3% of FY09 income)

The UK Financial Services (GB) segment provides banking products, such as residential mortgages and loans to Great Britain, Scotland, and Northern Ireland. From FY08 to FY09, UK Financial Services (GB) operating income increased 10% due to higher deposit volumes.

Losing Segments

  • The Bank of Ireland Life segment posted a €149 million lost from FY08 to FY09.
  • Group Centre lost €166 million in FY09.

Trends and Forces

U.K. Banks have been Hit just as Hard as U.S. Banks

U.S. banks, such as Bank of America (BAC), Citigroup (C), and Lehman Brothers (LEH), have suffered millions in losses due to the 2008 Financial Crisis. U.K. banks have not been immune to the U.S. crisis, as the U.K. government has invested €781.2 billion, compared to €9.1 trillion ($12.8 trillion) invested by the U.S. government.[2] U.K. banks have U.S. commercial real estate exposures -- in the form of loans and other debt mortgage-backed securities (MBS).[3] So hardships in the U.S. housing market and banks suffering losses due to subprime lending in turn causes foreign banks to suffer losses.

The Confederation of British Industry predicts that U.K. unemployment will peak at 3.03 million (9.6% of U.K. population) by Q310. On top of all that, the U.K. housing market has been miserable -- as mortgages to home buyers dropped 49% since the beginning of 2008 and housing prices have fallen 20% in that time span.[4] In efforts to reduce the downfall, the U.K. government is on pace to lend over £1 trillion to bailout banks in 2009, which it hopes will boost lending, but may just cause a bigger debt bubble. Investors might want to look further than "across the pond" for economic optimism.

Competition

  • Allied Irish Banks (AIB) is a major commercial bank based in Ireland. AIB is one of the so called Big Four commercial banks in Ireland. The bank has one of the largest branch networks in Ireland; only Bank of Ireland fully rivals it.
  • Royal Bank of Scotland (RBS-LN) is a holding company that lost €23 billion in 2008 due to the financial crisis. The bank provides lending and commercial banking, and competes with other U.K. banks such as Lloyds Banking Group (LYG) (another U.K. bank to be nationalized), and Barclays (BCS), as well as a handful of U.S. banks such as J P Morgan Chase (JPM).
Competition Bank of Ireland (IRE) Allied Irish Banks (AIB) Royal Bank of Scotland (RBS-LN)
Net Interest Income €M 3,670.00 3,867.00 18,675.00
Net Income €M 69.00 729.00 (23,710.0)
Loan Loss Provision €M 1,513.00 1,822.00 N/A
Total Assets €M 194,116.00 182,143.00 2,401,650.00
Total Liabilities €M 187,264.00 173,205.00 2,342,770.00
12 Month Correlation to IRE[5] 1.000 0.985 0.977

References

  1. Bank of Ireland: 9 month report
  2. Seeking Alpha, "These European Nations Are in Worse Shape than the U.S.," 06/15/09
  3. Seeking Alpha, "Second Stress Wave for European Banks," 04/23/09
  4. Seeking Alpha, "U.K. Housing Still a Risky Buy," 06/21/09
  5. Yahoo! Finance Historical Prices
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