Bank of Ireland Job Cuts & Profit Decline

bank of Ireland Navigates Economic Headwinds with Profit Dip,Job Cuts,and cautious Optimism

Dublin,Ireland – Bank of Ireland has reported a meaningful 31% drop in net profit for the first half of the year,a downturn attributed to declining net interest income and increased loan impairment charges,as the bank braces for potential economic fallout from US tariff-related risks.

In a statement released on Tuesday, the financial institution revealed its net profit fell to €608 million. This decline comes as net interest income decreased to €1.67 billion from €1.8 billion in the corresponding period last year. Despite the dip, the bank noted that the result was better than anticipated.

The lender also significantly increased its net impairment losses to €137 million, a sharp rise from €50 million in the previous year. this increase was primarily driven by a charge against its US acquisition finance book and a €40 million general provision set aside to account for the “evolving macroeconomic outlook.”

In response to these pressures and a strategic aim to keep running costs in check, Group Chief Executive myles O’Grady announced plans to cut 260 jobs in the latter half of this year, with further redundancies anticipated in 2026. These restructuring costs, amounting to €69 million, contributed to a substantial jump in one-off costs to €83 million, up from €11 million a year prior. The bank aims to maintain running costs at €2 billion over the next three years.

Despite the challenging environment, Bank of Ireland has marginally upgraded its full-year net interest income forecast to €3.3 billion, up from a previous projection of €3.25 billion. This comes as the bank continues to expect its business income, which includes contributions from its new Ireland life business and Davy, to rise by 5%.

“The group had a good first half performance,” stated Mr. 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.”

The bank reaffirmed its full-year guidance for net profit, projecting it to be equivalent to approximately 15% of shareholders’ tangible equity.

Looking ahead,the bank’s economists had previously upgraded their Irish economic forecasts,contingent on the EU reaching a trade deal with the US that would limit tariffs on Irish goods. However, the recent accord, which will see a 15% tariff applied to most EU imports, introduces a layer of uncertainty.

In other financial news, Bank of Ireland set aside a provision of £143 million (€167 million) last year for a potential compensation scheme related to a regulatory examination of the UK motor finance industry. A crucial UK Supreme Court ruling on test cases is expected imminently, which will determine the potential introduction of an industry-wide compensation scheme for customers affected by ancient discretionary commission arrangements.

The bank also announced an interim dividend of €243 million, or 25 cent per share, reflecting its recommencement of ordinary dividends in 2024. Since the beginning of 2023, the group has returned a substantial €2.6 billion to shareholders through buy-backs and dividends.

Full-time equivalent employees at the bank stood at 11,386 in june, a 2% increase year-on-year, largely due to seasonal staffing and the insourcing of IT work.