Bank of Ireland chief quits as profits plunge
BANK of Ireland governor Richard Burrows announced his resignation yesterday, after the bank reported a 96 per cent plunge in full year net profit due to restructuring and impairment loan charges.
Net profit for the year ending March 31 fell to €59m (£52m) from €1.69bn a year ago, beating forecasts but reflecting the bank’s exposure to Ireland’s faltering economy and ailing property market.
Burrows apologised for the bank’s poor performance, but also surprised the markets by announcing that the bank will buy back up to €1.4bn in its international debt obligations if bond-holders can agree on a reasonable price.
“Rather than having to buy back the bonds at par in a few years it makes huge sense for them to buy them back at 50 cents and below. We think Allied will be next,” said one Dublin-based trader.
Bank of Ireland is the latest lender to take advantage of deeply discounted secondary market prices to improve its capital position.
Shares in the lender soared 23 per cent on the better-than-expected results.