The results for the year to March were only 4% ahead when exceptional items were stripped out but were in line with market expectations.
Chief executive Brian Goggin said the results were strong and gave the bank confidence for the future. But this future would not include the 2,100 mostly back-office staff that will depart when terms are agreed with the Irish Bank Officials' Association before the end of the month.
Mr Goggin ruled out payoffs for older, higher-paid branch workers and said the bank would move 500 extra staff to front-line positions as part of the restructuring deal, which will cost €250 million. Most redundancies will come from removing overlaps in call centres and support functions.
The core retail division in Ireland had an "excellent" year, with profits shooting up 17% to €490m. Mortgage lending was 27% ahead, while other personal lending was 21% higher. Business banking continued its resurgence with a 23% increase in lending volumes, while balances in savings and deposit accounts grew by 12%.
Wholesale financial services, which includes treasury activity and lending to big corporates, delivered profits of €407m, a 10% increase. The life and pensions business saw profits fall 8% to €135m but this was due to a technical accounting change.
The bad news, however, kept coming from BIAM, the once-impressive asset management division. The unit leaked business during the year, as major pension fund clients in North America deserted on the back of a poor investment performance and the departure of four top BIAM executives. Profits fell 8% to €115m but funds under management collapsed from €57.5bn to €46.9bn at year-end. This figure fell by a further €1.3bn in the first month of the new financial year.
But Mr Goggin quashed rumours that the division would be sold and said BIAM would recover over the next two to three years.
There was also bad news for current account customers who hoped the bank would match Permanent TSB's free banking package. Retail division chief executive Des Crowley said the current offer was competitive and that cutting bank charges would be "seriously detrimental" to the bank's profits. But he said the bank had lost a small number of customers since rules to make switching banks easier took effect earlier this year.
Mr Goggin also declined to say whether the bank had reached a settlement with Michael Soden, who resigned as chief executive last year after it was leaked to the media that he had used his work computer to view material that breached bank policy. Details of a lump sum payment are expected to be published in the annual report. Shareholders, however, will be happy with dividend payments of 45.6c per share, 10% more than the previous year.
It sounds a lot, but only around one-third of the bank's profits, or €1.2m per day, comes from its branch network.
It makes almost as much from big businesses through corporate and treasury activity as from the branches. The rest comes from Britain or its life assurance and pensions business at home.
Only because customers allow them to. There's nothing to stop a customer taking their current account business to one of the banks that offer free banking, like Permanent TSB and National Irish. It's never been easier to switch banks, thanks to new rules. Although Bank of Ireland ruled out free banking yesterday, it would change its tune quickly if it found itself losing lots of customers.
Well, where are these profits going? The bank made €1.3 billion last year. Almost 20%, or €250m, goes straight to the taxman. That leaves a little over €1bn; €450m will be paid to shareholders in the form of dividends - around 45c for every €12.20 share. The bank holds on to the rest to run the business. Remember the bank's shareholders include most of the country's pension funds and investment managers. So, if you have a pension or a stock market-linked investment product, you're probably benefiting from Bank of Ireland's profits.
The bank has ruled out getting rid of experienced branch staff in favour of younger, cheaper replacements.
Most of these cuts will come from call centres and so-called 'back offices' - mostly administrative and support staff. The chances are these payoffs will be reasonably generous, and being made redundant now, when unemployment is 4%, isn't as bad as when it was 20%. The bank says it has no choice but to strip out costs, to remain competitive. Top executives argue if they don't run the business as efficiently as possible, a foreign bank will step in, take over and do the dirty work instead.
If anything, the Government has its hand in your pocket more than any bank. The State already hits you for €40 every year just for having a credit card - most banks, on the other hand, charge no credit card fees and only make money if you don't pay your bill every month.