BoI expects operating profits for 2010 to drop 30%

BANK OF IRELAND has said that its deposit levels have stabilised over the past couple of months, but it expects operating profits for 2010 to show a 25%-30% drop due to an increase in funding costs.

The bank generated an operating profit of €1.4bn in its previous year, but the higher cost of central bank funding - rather than from the wholesale markets - ate into its 2010 profits, it indicated in a trading update yesterday.

However, it added that the outflow of deposits late last year had stabilised since the announcement of the Government’s EU/IMF rescue package.