Fall of up to 40% in Bank of Ireland operating profit

BANK of Ireland has reported its underlying operating profit, before bad debts, for the year to December 2010 will be 35% to 40% lower than the €1.5 billion reported in 2009.

In its interim management statement, the bank says the reduction was due mainly to lower operating income and the higher cost of Government guarantees. It also said intense competition for deposits, combined with the higher cost of wholesale funds, had hurt its performance.

Shares in the bank, the country’s biggest lender, closed up 6.25% at 41cents in Dublin last night.