Bank of Ireland Loss Widens, but Still Working Toward 2013/14 Goals

The Bank of Ireland (NYSE: IRE) may be down and out and its loss may have widened, but the good news is that the last of the New York-listed Irish banks gets to live another day. The loss widened to 1.26 billion euros from 556 million euros a year ago in the same period. Bloomberg only had three estimates, but that group’s average was for a loss of only 899 million euros.

Chief Executive Officer Richie Boucher said that his target of rebuilding margins higher in 2014 is going to be a very challenging notion. It is not just that the loss more than doubled. These incredibly low interest rates are proving to be very challenging for Bank of Ireland as the net interest margin in the first half was down to 1.20 points from 1.33 points for the first half of 2012. Does the challenge on net interest margin sound familiar?

The bank’s aim to lower its loan-loss provisions and to shrink the size of its balance sheet apparently remains on track. It is worth noting that the loan-loss provision was higher and that the CEO believes this will improve as the economy improves. As the economy improves? Isn’t Ireland one of the PIIGS, and isn’t it in Europe? Finding a way to milk out another two percentage points is proving to be a difficult goal on its net interest margin. Again, does this sound familiar?

There may be some additional hope from outside of the bank. The Irish central bank has recently noted that Irish banks relied less on the European Central Bank in July.

ADRs for the Bank of Ireland are currently down 2% at $5.38 in New York trading.

JON C. OGG