BoI’s Bristol sale to net €44m extra

BANK OF IRELAND’S sale of its struggling Bristol & West branch network in Britain will yield €44 million more in profits than originally expected, the bank said yesterday.

The bank said the €218m sale to the Britannia building society would result in a once-off after-tax profit of €175m. This compared with an anticipated benefit of €131m when the deal was announced in May. The difference was down to transaction-related costs that were lower than expected and more favourable taxation treatment than had been predicted.

The bank also said the sale, formally completed yesterday, would have little or no impact on its future earnings but would strip out ongoing costs and improve the group’s overall cost-income ratio, a key measure of profitability.

Chief executive Brian Goggin said the deal represented good value for shareholders and was consistent with the bank’s strategy.

“Bank of Ireland remains committed to the UK market, which accounts for a significant element of the group’s interests, and will remain a core market for the group,” he said.

The bank’s future focus in Britain will be on mortgages, business banking and its joint venture to sell financial services through the Post Office network.

The Bristol & West 97-strong branch network recorded a marginal loss of €600,000 last year.

It had struggled to break even for a number of years on the back of increasing competition in the mortgage market. The sale also allowed Britannia to get its hands on Bristol & West’s deposit book, which is worth almost €7 billion.