Aug. 11 (Bloomberg) -- Bank of Ireland Plc, the country’s biggest lender by market value, said first-half profit fell 66 percent after taking losses on loans it’s selling to the government’s so-called bad bank.
Net income declined to 140 million euros ($183.6 million) from 410 million euros a year earlier, the Dublin-based bank said in a statement today. It had a 466 million-euro loss on loans being transferred to Ireland’s National Asset Management Agency, and made provisions for another 466 million euros of losses on assets due to go to the agency.
The bank’s pretax loss excluding one-time items widened to 1.25 billion euros from 668 million euros. The company raised about 2.9 billion euros in June to meet new capital standards set by Ireland’s financial regulator as bad debts mounted after a decade-long real estate boom collapsed.
“We have much greater control over our own destiny,” Chief Executive Officer Richie Boucher said on an analysts’ call.
The lender’s impairment charges on loans not going to the asset agency fell to 893 million euros from 928 million euros. The bank said that losses on these loans peaked last year and will decline over the next two years. The bank said it sees signs that the Irish and U.K. economies are stabilizing.
“The results are a positive sign that management is on top of the factors that are within the group’s control,” said Stephen Lyons, an analyst with Davy, the Dublin-based securities firm. He has an “outperform” rating on the stock.
Bank of Ireland fell 0.6 percent to 84 euro cents at the 5:10 p.m. close of Dublin trading, giving the company a market value of 4.4 billion euros.
Rival Allied Irish Banks Plc fell 1.2 percent to 86 cents. Allied Irish is seeking to raise as much as 7.4 billion euros by the end of the year and may face majority state ownership by the end of the year, Lyons said. The government has a 36 percent stake in Bank of Ireland.
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