97,000 Bank of Ireland Covid-19 payment breaks have ended

More than 100,000 payment breaks were put in place during the Covid-19 pandemic

Bank of Ireland chief executive Francesca McDonagh will tell the Oireachtas Finance Committee that negative interest rates and strict lending rules from the Central Bank have reduced profitability and are limiting the market. Picture: RollingNews.ie

Bank of Ireland put in place more than 100,000 payment breaks during the Covid pandemic and, so far, some 97,000 have come off such breaks, the Oireachtas Finance Committee will hear on Tuesday.

In her opening statement, Bank of Ireland chief executive Francesca McDonagh will say that negative interest rates and strict lending rules from the Central Bank have reduced profitability and are limiting the market.

She will tell TDs the decision of NatWest to withdraw from the Irish market “reflects the realities of a challenged sector and has thrust the dynamics of Ireland’s banking sector further into the spotlight”.

“To attract private capital into the Irish market, we need to ensure that the legislative and regulatory environment can address and support the banking challenges of 2021 and beyond,” Ms McDonagh will say.

She will say that in Ireland, discussions on banking often generate more heat than light, which poses a risk to the sector, and she will also note the proposed sale of Davy, but will not comment further on the process.

From September 2021, Bank of Ireland is to begin reducing the number of its branches in the Republic of Ireland by 88 from 257 to 169.

I have seen our branch announcement interpreted as the bank using reduced footfall caused by the pandemic as an excuse to close branches. This is not the case. 

"Customer trends have been moving in one direction ever since the advent of mobile technology and online banking. While changes in customer behaviour – across a range of sectors – have been accelerated by the pandemic, the migration to digital has been a reality in banking for many years,” Ms McDonagh will say.

The number of visits to branches is now just over half of what they were in 2017 and footfall at the branches which are closing is down even more, by about 60% since 2017, Ms McDonagh will tell the committee, chaired by Fianna Fáil Kilkenny TD John McGuinness.

Ms McDonagh will say Bank of Ireland is the only institution to have fully repaid the Irish taxpayer for the bailout it was given a decade ago.

To date, Bank of Ireland has returned €600m to the State, delivering a €1.2bn net cash return, she will say. Over the past three years, a further €40m in dividends have also been paid by Bank of Ireland to the State.