Bank of Ireland 2020 Debt Investor Presentation
Net interest income declines on surplus liquidity
and low rate environment
Net interest income / NIM
Bank of Ireland 2020 Debt Investor Presentation
€2,180m
€2,167m
€2,115m
286bps
282bps
281bps
23%
23%
26%
(12bps)
(19bps)
(26bps)
2018
2019
2020
Loan asset spread¹
Liquid asset spread¹
Liquid assets as % of AIEAS
2.14%
NIM movement
(12bps)
(4bps)
2bps
2.00%
FY 2019
Liquid assets
Structural hedge
Lending mix
FY 2020
Net interest income and NIM lower from surplus
liquidity and low rates
•
Pricing discipline maintained across all portfolios
Improved margins on new UK mortgage lending (+43bps
in 2020 vs. 2019)
Reduced yield on liquid assets and structural hedges the
primary driver for income and margin decline
-
Liquid assets as a % of average interest earning assets
increased to 26% in 2020 vs. 23% in 2019
Application of negative rates to business customers
expanded to €8.5bn in 2020; further expansion in 2021
planned
Reduction in funding costs of €31m in 2020; €55m on
an annualised basis
Lower wholesale funding costs (average wholesale
funding yield c.30bps lower in 2020 vs. 2019)
1 Spread = Loan asset yield or Liquid asset (excl. NAMA bonds) yield less Group's average cost of funds
Bank of Ireland
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