No BoI plan to shift losing trackers off balance sheet

Bank of Ireland is not involved in any plans to shift loss-making tracker mortgages off the balance sheets of the major banks and into asset management vehicles, such as the Irish Bank Resolution Corporation.

“We’ve not engaged in any such discussions, but we’re keeping a close eye on developments,” said bank chief executive Richie Boucher.

“It is more difficult for us to be involved as we’re not owned by the State,” he added.

Mr Boucher made the comment in direct response to a question from the floor of Bank of Ireland’s annual general meeting yesterday at UCD.

The Government is looking to move loss-making trackers from the books of the State-owned institutions of AIB and Irish Life & Permanent into the IBRC.

The state only owns a 15% stake in Bank of Ireland.

In its first quarter trading update, published yesterday, Bank of Ireland added that trading conditions had remained “challenging” to date this year and that its operating profit and net interest margin levels continued to be “adversely impacted” by funding costs and fees relating to the Government’s bank guarantee scheme.

While it said that its asset quality remains “broadly in line with our expectations” and further progress had been made towards raising €10bn from non-core disposals, the bank warned that while consumer confidence levels had shown marginal improvements since the turn of the year, “domestic economic indicators remain weak, unemployment remains elevated, and residential property prices do not appear, as yet, to have fully stabilised”.

The bank added that its operating costs remain “under strict control” and that “strong cost discipline, implemented across the group, continues to deliver cost savings, as anticipated”.

However, on the cost reduction issue, management indicated that further job cuts — over and above the 750 cuts already factored into its redundancy plan — are possible.

Back in February, at the time of the publication of its 2011 annual results, the bank said its overall loan losses should start declining this year, but that more property repossessions were likely as the level of mortgage arrears, among its customers, continued to climb.

Mr Boucher said yesterday that the bank currently had 500 staff working on matters relating to mortgage arrears.

He said that maximising loan repayments remained a priority, but the company would be working “with empathy” with customers in difficulty.