RNS Number:9904R
Bank of Ireland(Governor&Co)
12 November 2003
BANK OF IRELAND GROUP
Interim Statement
For the half year to 30 September 2003
HIGHLIGHTS
A strong Group performance
* Profit before tax and exceptional items + 7%
* Alternative EPS + 6%
* Underlying Alternative EPS + 11%
Alternative EPS +6% +6%
Irish Government Bank Levy +3%
UK Financial Services profit (translation 3%
impact)
Change in accounting policy -1%
+11%
Strong cost management
* Positive cost/income gap of 3%
* Total costs down by 2%
* Cost income ratio 53%, improved by 2%
Successful capital management strategies
* Dividend growth of 12%
* Rolling share buy-back programme
* Strong capital ratios
* Tier 1 7.6%
* Total 10.5%
Positive portfolio management developments
* Profitable sale of share in State Street Alliance
* Significant new joint venture announced with UK Post Office
" We have made encouraging progress in pursuit of each of our key strategic
goals - by achieving good organic growth while maintaining excellent credit
quality, delivering on our cost/income targets, optimising capital returns and
completing a number of important strategic initiatives. The Group is in
excellent shape with significant prospects for continuing profit growth."
Michael D Soden
Group Chief Executive
BANK OF IRELAND GROUP
Interim Statement
For the half year to 30 September 2003
FINANCIAL SUMMARY
RESULTS Half Year Half Year Change %
30-9-2003 30-9-2002
Eurom Eurom
Profit on ordinary activities before exceptional items 642 602 7%
Profit before taxation 670 580 16%
PER UNIT OF Euro0.64 ORDINARY STOCK
Earnings per share 54.3c 46.8c 16%
Alternative earnings per share 52.7c 49.9c 6%
Dividend per share 14.8c 13.2c 12%
BALANCE SHEET*
Total assets 98,703 89,631 10%
Total stockholders' funds 4,274 4,436 (4%)
Capital Ratios
Tier 1 capital 7.6% 7.4%
Total capital 10.5% 10.6%
Key Ratios
Net interest margin** 2.20% 2.31%
Costs/total income 53% 55%
Return on average stockholders' funds 24% 23%
Equity/assets 4.0% 4.4%
*Restated for changes due to UITF Abstract 37, see page 18.
**Restated to present trading revenue in accordance with international practice in treasury trading book
operations, dealing profits now include profits and losses relating to treasury Trading Book - Mark to Market
activities.
BANK OF IRELAND GROUP
Interim Results
For the six months to 30 September 2003
Bank of Ireland Group is pleased to report growth in profit before tax
and exceptional items of 7% and alternative EPS growth of 6% for the six
months to 30 September 2003. Underlying alternative EPS growth was 11%
when the impact of the Irish Government levy on banks, adverse exchange
rate movements, and the effect of an accounting policy change are
excluded. The result reflects a robust performance by both the domestic
and international businesses with good organic growth while maintaining
excellent credit quality, and tight control of costs.
The recovery in world markets has had a positive influence in both the
Asset Management and Life and Pensions businesses.
The domestic market remains buoyant and Bank of Ireland has proven its
ability to maintain and increase its market share of the most hotly
contested products, such as mortgages, deposits and credit balances,
despite the entry of new competitors to the market and the emergence of
large and well-resourced competitors as a result of consolidation.
The economic outlook in the Republic of Ireland remains good and
consensus forecasts suggest steady growth in the 3% to 5% range, falling
inflation, low unemployment and stable property values. The United
Kingdom also presents very encouraging economic prospects and the
Group's two principal markets are among the best performing in either
the EU or the OECD.
Very encouraging progress has been made in the UK. The UKFS Division
achieved a 16% increase in pre-tax profits (before goodwill amortisation
and exceptional items) at constant currency in the six months; it was
subject to a thorough review and analysis and it has embarked upon an
ambitious cost reduction and revenue enhancement programme. In a
parallel development, the Group announced that it is to enter into a
joint venture with Post Office Ltd to distribute a range of financial
services products through the UK post office network, the largest retail
network in Europe. Both developments represent significant progress
towards the Group's objectives for the UK market, which will play an
important role in the generation of enhanced stockholder returns into
the future.
The Group net interest margin has reduced from 2.31% in September 2002
to 2.20% for the current half year, a reduction of 11 basis points. This
reduction mainly arises on the liability side of the Balance Sheet due
to the lower interest rate environment and the cost of increased
wholesale borrowings to fund the growth in lending, which is growing at
a faster rate than customer resources. In addition, the faster growth in
lower risk margin assets e.g. mortgages, has a negative effect on the
overall net interest margin, and the interest foregone on the funding of
the share buy-back programme, whilst positive in EPS and shareholder
value terms, also impacts the margin.
Cost management has been a strategic priority in the Group. We have
delivered on our cost/income targets and significant progress has been
made in managing costs downwards and achieving better efficiency levels.
Costs fell by 2% during the six months. A positive gap of 3% was
achieved between cost and income growth and the Group cost/income ratio
has fallen to 53% from 55%.
The loan loss charge is lower than at the same time last year after a
reduction in general provisions, and asset quality remains very
satisfactory. The increase in balances under provision reflects some
additional specific provisions in the international book and in
non-mortgage lending in Ireland. Loan loss provisions, at 15 basis
points of total loans, reflect the prudent and consistent approach to
underwriting and management of credit across the Group.
Capital ratios, including the equity/assets ratio of 4%, remain very
strong, with Tier 1 Capital at 7.6% and Total Capital at 10.5%, both
significantly ahead of statutory minima. The Group continued its rolling
share buy-back programme, which began in February 2003 and to date has
purchased 36.7 million units of stock at a total cost of Euro382 million.
The rolling share buy-back programme, our progressive dividend policy
and positive portfolio management developments demonstrate that we are
delivering on our strategic goal of optimising stockholder returns.
Divisional Performance
Half Year to 30.9.2003 Half Year to 30.9.2002
Eurom Eurom
Retail Republic of Ireland 194 189
Bank of Ireland Life 73 56
Wholesale Financial Services 199 195
UK Financial Services 180 166
Asset Management Services 58 56
Group and Central (48) (38)
Grossing up (14) (22)
Profit before taxation and 642 602
exceptional items
Operating and Financial Review
Retail Republic of Ireland
Pre-tax profits rose by 3% to Euro194 million compared with the
corresponding period last year. When gains from property disposals are
excluded for both periods the increase was 7%.
This was a very satisfactory performance with strong volume increases,
gains in market share, sound asset quality and good cost control.
Mortgage demand remained very strong through the period. New business
volumes increased by 32% resulting in balances growth of 29%. The Bank's
share of new business was well ahead of last year and its share of the
national mortgage book continues to increase.
Net interest income was up 5%, a good performance in a period of
historically low interest rate levels.
Resources increased by 8% with solid growth in both credit balances and
deposits.
Despite the economic environment, growth of 11% was achieved in the
non-mortgage lending book. New lending to the business sector was
exceptionally strong reflecting an increased focus by the branch network
and the success of Retail's Specialist Business Bank; loan balances grew
by over 14%.
Net interest margin showed some contraction reflecting the very low
level of interest rates and the faster growth in lower margin assets,
particularly mortgages.
Non-interest income saw marginal growth, but with gains from property
disposals excluded there was growth of 6%. Branch fee and foreign
exchange income were significant contributors to this increase.
The loan loss charge increased slightly but as a percentage of advances
decreases by 4 basis points to 26 basis points.
Costs rose by 4% with key factors being salary increases under the
national agreement and higher depreciation charges.
The momentum in business volumes is strong and given a continuation of
this trend the outlook for the rest of the year is very positive.
Bank of Ireland Life
Pre-tax profit was 30% higher than for the corresponding period last
year, substantially driven by the recovery in world equity markets.
The Government sponsored savings scheme affected new business sales with
overall volumes falling by 41%. While this impacted operating profits,
which were down 21%, this is a good performance compared to our
competitors and sales of other products were ahead with good momentum
evident into the second half of the year.
The discount rate applied to the embedded value has been reduced from
10% to 8% to reflect the low interest rate environment. In addition, the
business now discounts the solvency margin in accordance with the
Association of British Insurers guidelines, and has also reduced the
assumption in respect of future growth in unit-linked assets. These
changes positively impact profitability by Euro19 million (September '02:
+Euro31 million).
Bank of Ireland Life has a strong strategic position in both the bank
and broker channels. The Company offers an exceptional investment track
record and customer proposition and is well placed to benefit from an
expected recovery in sales as confidence steadily returns to the market.
Wholesale Financial Services
Profit before tax increased by 2% to Euro199 million compared to the same
period last year. Net interest income was ahead by 10%, whilst other
income (including share of joint venture) fell by 3% - the latter a
factor of the number of large once-off transactions that took place in
the comparable period of the prior year. Total income increased by 2%
while costs fell by 2%.
The loan loss charge as a percentage of the loan book, at 27 basis
points, was higher than the first half of last year by 7 basis points
and the full year outturn by 6 basis points. The increase arises from
some specific provisions, and higher general provisioning for the
international book in the light of experience and international
benchmarking. The loan book remains well diversified, with good asset
quality and no undue risk concentrations.
Corporate Banking reported an increase in pre-tax profits of 8% with a
very strong 15% increase in total income. Lending volumes were up 7%
despite flat lending in the domestic market. Deposits have grown
strongly.
Treasury and International Banking benefited from falling interest rates
and a strong trading performance. Profits increased by 1% in the period
under review, a good performance in the prevailing environment.
First Rate, the Group's specialist foreign exchange subsidiary, overcame
the continuing difficulties in the international Travel and Tourism
Industry and increased its profits by 2%. Its joint venture with Post
Office Ltd, the UK Post Office network, was a significant contributor
and is now the second largest provider of retail foreign exchange in the
UK market. It will complement the new joint venture announced by the
Group and the UK Post Office to distribute a wider range of financial
services products.
Private Banking, Davy and IBI Corporate Finance each performed well and
generated satisfactory profits for the half year.
UK Financial Services
UK Financial Services (UKFS) achieved 16% profit growth (before goodwill
amortisation) in constant currency compared to the same period last
year. Costs were stable, assisted by the restructuring of the advice
based businesses.
The overall performance of the Division was strong, with excellent
progress on the achievement of some important strategic objectives. The
Personal Lending (which incorporates the mortgage business) and Business
Banking businesses performed strongly with robust income performances
and lower loan loss charges, while Consumer Banking - incorporating the
Bristol & West branch network and our IFA business - continues to be
impacted by low levels of investor confidence. The Consumer Banking
businesses have or are currently undergoing fundamental rationalisation
and re-organisation.
The cost income ratio of the Division has fallen to 55% from 56% and the
medium term target is a cost/income ratio of sub 50%.
There has been a marginal decrease in resources over the period whilst
the loan book has increased by 13% over September 2002, with growth in
all areas of the book and continuing strong growth in the non-standard
residential mortgage books. Non-standard mortgages now represent 21% of
the UKFS total loan book (29% of residential mortgages) and UKFS
achieved its natural market share of gross lending. Asset quality
remains very strong.
Net interest margin has contracted mainly due to lower returns from the
resources book.
Asset Management Services
Asset Management Services, which incorporates the Group's asset
management and securities services businesses, achieved a 13% profit
growth before goodwill amortisation (pre-tax profits increased by 4% to
Euro58 million). On a like for like basis, when the impact of the sale of
the Group's share of the alliance with State Street is taken into
account, the profit increase was 16% pre goodwill amortisation (7%
profit before taxation). The improvement was driven by the inclusion of
a full six-month contribution from the Group's share of Iridian and good
revenue and cost management in Bank of Ireland Asset Management despite
a decline in average assets under management of 8% compared to the same
period last year.
Point in time assets under management in Bank of Ireland Asset
Management rose sharply to Euro50.6 billion at the end of the period
compared to Euro42.7 billion at 31 March 2003 - a rise of 19%. Net inflows
of Euro1.4 billion were recorded during the period, with significant new
business in the UK.
Bank of Ireland Securities Services completed the sale of its share in
the alliance with State Street during the period. The profit on this
transaction is shown as an exceptional item and is excluded from
alternative EPS.
Iridian has successfully implemented the agreed operating model and made
a number of significant hirings, which have strengthened the team, and
is now focused on developing a greater profile for its products.
Group and Central
Group and Central which includes earnings on surplus capital and central
unallocated costs together with some small business units had a net cost
of Euro48 million in the current period compared to a net cost of Euro38
million in the period to September 2002. This is due to lower earnings
on surplus capital as a result of lower interest rates, the interest
cost of the Stg#350 million Tier 1 issue, and the funding cost of the
rolling share buy-back programme which has a negative impact on net
interest income and profit before taxation but is accretive in EPS and
shareholder value terms.
Financial Review
The Group Profit & Loss Account for the half years to 30 September 2003
and 30 September 2002 is set out below:
Half Year to Half Year to
30-9-2003 30- 9-2002
Eurom Eurom
Net Interest Income 852 849
Other Income 611 605
------ ------
Total Operating Income 1,463 1,454
Operating expenses 794 814
Provision for bad and doubtful debts 46 56
Income from associated undertakings and joint ventures 19 18
------ ------
Profit on ordinary activities before exceptional items 642 602
Exceptional items 28 (22)
------ ------
Profit before taxation 670 580
==== ====
Income
Average Earning Assets Net Interest Margin
30.9.2003 30.9.2002 30.9.2003 30.9.2002
Eurobn (restated) % (restated)
Eurobn %
47.4 42.7 Domestic 2.38 2.52
31.1 31.8 Foreign 1.93 2.03
------ ------ ------ ------
78.5 74.5 Group 2.20 2.31
==== ==== ==== ====
Net interest income at Euro852 million for the half year is similar to the
corresponding period last year, but ahead by 4% on a constant currency
basis. Group average earning assets increased by 5% (10% on a constant
currency basis), with average loans and average customer resources
increasing by 9% and 2% respectively, on a constant currency basis. The
Group net interest margin fell by 11 basis points to 2.20% from 2.31%,
attributable to lower margins in Retail Republic of Ireland and UK
Financial Services mainly resulting from reductions in ECB and UK
interest rates, a higher proportion of mortgage assets, increased
reliance on wholesale funding and the funding cost of the share buy-back
programme.
Other income increased by Euro6 million, positive factors being increased
transaction volumes in Retail Republic of Ireland, countered by the
weakening of sterling against the euro and lower gains from property
disposals. The recovery in world stock markets had a positive effect
mainly on our Life business.
Operating Expenses
Operating expenses, at Euro794 million, are 2% lower than September 2002;
on a constant currency basis, costs increased by 1%. The staff cost
increase was largely due to the national wage agreement in the Republic
of Ireland. The increase in other expenses was due to a small increase
in depreciation charges, and investment in the business.
Cost reduction programmes throughout the Group were very successful in
containing total costs and resulted in a positive gap of 3% between
income and cost growth. The cost/income ratio reduced from 55% to 53% in
the half year.
Loan Losses
Asset quality remains satisfactory. The charge for loan losses was Euro46
million or 15 basis points of average loans compared to Euro56 million (19
basis points) in the same period last year. Balances under provision
were Euro376 million compared to Euro293 million and reflect the increase in
specific provisions in the international book and in non-mortgage
lending in Ireland.
Exceptional Items
The results for the half year include, as an exceptional item, a profit
of Euro28 million which is made up of:
* the net proceeds of Euro33 million on the sale of our share in
the alliance between Bank of Ireland Securities Services and
State Street Bank,
* implementation costs of Euro1 million associated with the UKFS
Business Improvement Programme,
* additional costs of Euro4 million incurred in relation to
restructuring undertaken in previous years.
Capital & Reserves
Stockholders' equity, at Euro4.3 billion for the half year to September
2003, is lower than the corresponding period reflecting the Euro382 million
cost of the share buy-back programme. Capital ratios remain strong with
a Tier 1 ratio of 7.6% and a total capital ratio of 10.5%. Return on
equity was 24% for the six months to September 2003.
Interim Dividend
In accordance with Group policy that the interim dividend, in normal
course, shall be set at 40% of the total distribution per unit of stock
for the prior year, the Directors have declared an interim dividend of
14.8 cent for each unit of Ordinary Stock. This compares with 13.2 cent
at the interim stage last year, an increase of 12%, a continuation of
our progressive dividend policy.
The interim dividend will be paid on 6 January 2004 to Stockholders who
are registered as holding Ordinary Stock at the close of business on 5
December 2003.
Outlook
We view the immediate future with optimism. The economic backdrop in our
principal markets is positive, each of our businesses is performing
well, we have strong asset quality, we are very comfortably capitalised
and we are delivering against our key strategic objectives.
Consequently, we expect a satisfactory outcome for the full year.
Laurence Crowley
Governor
13 November 2003
For further information:
John O'Donovan Group Chief Financial Officer 353 1 632 2054
Fiona Ross Head of Group Investor Relations 353 1 604 3501
David Holden Head of Group Corporate Communications 353 1 604 3833
John O'Donovan, Group Chief Financial Officer will host a conference
call at 5.00pm (GMT) on Thursday 13 November 2003. Dial in details are:
Ireland 01 4390433
UK & Europe 020 7769 6433
US 847 413 3634
A replay facility is available from 7.00pm (GMT) on 13 November 2003 to
5.00pm (GMT) on 20 November 2003. Replay numbers are:
Ireland 01 2400041
UK & Europe 020 7769 6425
US 630 652 3000
Security Number: 284074#
Forward Looking Statement
This document contains certain forward-looking statements as defined in
the US Private Securities Litigation Reform Act of 1995 with respect to
certain of the Group's plans and its current goals and expectations
relating to its future financial condition and performance and the
markets in which it operates. Because such statements are inherently
subject to risks and uncertainties, actual results may differ materially
from those expressed or implied by such forward-looking statements. Such
risks and uncertainties include but are not limited to risks and
uncertainties relating to profitability targets, prevailing interest
rates, the performance of the Irish economy and the international
capital markets, the Group's ability to expand certain of its
activities, competition, the Group's ability to address information
technology issues and the availability of funding sources. The Bank of
Ireland Group does not undertake to release publicly any revision to
these forward-looking statements to reflect events, circumstances or
unanticipated events occurring after the date hereof.
GROUP PROFIT AND LOSS ACCOUNT (UNAUDITED)
Half Year Half Year Year
30-9-2003 30-9-2002 31-3-2003
(restated)
Eurom Eurom Eurom
INTEREST RECEIVABLE
Interest receivable and similar income arising from debt securities 154 175 344
Other interest receivable and similar income 1,584 1,700 3,347
INTEREST PAYABLE 886 1,026 1,962
---------- ---------- ----------
NET INTEREST INCOME 852 849 1,729
Fees and commissions receivable 552 500 1,011
Fees and commissions payable (94) (50) (140)
Dealing profits 43 33 85
Contribution from life assurance companies (Note 5) 87 71 116
Other operating income 23 51 116
---------- ---------- ----------
TOTAL OPERATING INCOME 1,463 1,454 2,917
Administrative expenses (Note 3) 710 730 1,480
Depreciation and amortisation (Note 3) 84 84 182
---------- ---------- ----------
OPERATING PROFIT BEFORE PROVISIONS 669 640 1,255
Provision for bad and doubtful debts (Note 10) 46 56 100
---------- ---------- ----------
OPERATING PROFIT 623 584 1,155
Income from associated undertakings and joint ventures 19 18 22
---------- ---------- ----------
PROFIT ON ORDINARY ACTIVITIES BEFORE EXCEPTIONAL ITEMS 642 602 1,177
Exceptional items (Note 6) 28 (22) (164)
---------- ---------- ----------
PROFIT BEFORE TAXATION 670 580 1,013
Taxation (Note 7) 120 98 163
---------- ---------- ----------
PROFIT AFTER TAXATION 550 482 850
====== ====== ======
GROUP PROFIT AND LOSS ACCOUNT (UNAUDITED) (CONTINUED)
Half Year Half Year Year
30-9-2003 30-9-2002 31-3-2003
(restated)
Eurom Eurom Eurom
PROFIT AFTER TAXATION 550 482 850
Minority interests: equity 6 2 9
Minority interests: non equity 3 3 6
Non-cumulative preference stock dividends 4 5 9
---------- ---------- ---------
PROFIT ATTRIBUTABLE TO THE ORDINARY STOCKHOLDERS 537 472 826
Transfer to capital reserve 53 53 44
Ordinary dividends 143 133 371
---------- ---------- ---------
PROFIT RETAINED FOR THE PERIOD 341 286 411
====== ====== ======
Earnings per unit of Euro0.64 ordinary stock (Note 8) 54.3c 46.8c 82.0c
====== ====== ======
Diluted earnings per unit of Euro0.64 ordinary stock (Note 8) 54.0c 46.3c 81.2c
====== ====== ======
Alternative earnings per unit of Euro0.64 ordinary stock (Note 8) 52.7c 49.9c 99.2c
====== ====== ======
CONSOLIDATED BALANCE SHEET (unaudited)
30-9-2003 30-9-2002 31-3-2003
(restated) (restated)
Eurom Eurom Eurom
ASSETS
Cash and balances at central banks 323 349 679
Items in the course of collection from other banks 566 476 508
Central Government and other eligible bills 165 134 175
Loans and advances to banks 9,437 7,492 7,480
Loans and advances to customers (Note 9) 61,409 57,440 56,887
Securitisation and loan transfers 656 950 794
Less: non returnable amounts 571 812 667
---------- ---------- --------
85 138 127
Debt securities 14,626 12,649 12,337
Equity shares 56 41 38
Interests in associated undertakings 13 17 13
Interest in joint ventures 39 18 25
Intangible fixed assets 252 429 266
Tangible fixed assets 1,217 1,245 1,209
Other assets 3,531 3,179 3,841
Prepayments and accrued income 668 747 543
---------- ---------- ----------
92,387 84,354 84,128
Life assurance assets attributable to policyholders 6,316 5,277 5,342
---------- ---------- ----------
98,703 89,631 89,470
====== ====== ======
CONSOLIDATED BALANCE SHEET (unaudited)
30-9-2003 30-9-2002 31-3-2003
(restated) (restated)
Eurom Eurom Eurom
LIABILITIES
Deposits by banks 16,876 14,218 12,617
Customer accounts (Note 11) 50,251 49,409 48,496
Debt securities in issue 11,346 8,044 9,652
Items in the course of transmission 125 94 136
to other banks
Other liabilities and provisions 5,926 4,847 5,642
Accruals and deferred income 733 773 541
Deferred taxation 53 84 54
Subordinated liabilities 2,679 2,283 2,703
Minority interests
- equity 52 86 54
- non equity 72 80 73
Called up capital stock (Note 12) 679 679 679
Stock premium account (Note 13) 764 771 765
Capital reserve (Note 13) 489 448 436
Profit and loss account (Note 13) 2,162 2,331 2,099
Revaluation reserve (Note 13) 180 207 181
---------- ---------- ---------
Stockholders' funds including non 4,274 4,436 4,160
equity interests
---------- ---------- ----------
Life assurance liabilities 6,316 5,277 5,342
attributable to policyholders
---------- ---------- ----------
98,703 89,631 89,470
====== ====== ======
MEMORANDUM ITEMS
30-9-2003 30-9-2002 31-3-2003
Eurom Eurom Eurom
Contingent liabilities
Acceptances and endorsements 31 66 81
Guarantees and assets pledged as collateral security 1,293 1,157 1,172
Other contingent liabilities 501 421 508
---------- ---------- ----------
1,825 1,644 1,761
====== ====== ======
Commitments 20,797 18,394 19,050
====== ====== ======
NOTE OF HISTORICAL COST PROFIT AND LOSS (UNAUDITED)
There is no significant difference between the results as disclosed in the
profit and loss account and the results on an unmodified historical cost basis.
RECONCILIATION OF MOVEMENT IN STOCKHOLDERS' FUNDS (unaudited)
Half Year Half Year Year
30-9-2003 30-9-2002 31-3-2003
(restated) (restated)
Eurom Eurom Eurom
Opening Stockholders Funds 4,160 4,200 4,200
Prior year adjustments - (27) (27)
----------- ----------- ----------
4,160 4,173 4,173
Profit attributable to ordinary stockholders 537 472 826
Dividends (143) (133) (371)
----------- ----------- ----------
4,554 4,512 4,628
Other recognised losses (50) (84) (346)
Ordinary stock issued under employee stock scheme 23 4 6
Ordinary stock buy-back (249) - (133)
Purchase of stock by subsidiary (4) - -
Goodwill written back on disposal of subsidiary - 4 5
----------- ----------- ---------
Closing Stockholders Funds 4,274 4,436 4,160
======= ======= ======
Stockholders' funds:
Equity 4,209 4,369 4,095
Non equity 65 67 65
----------- ----------- ----------
4,274 4,436 4,160
======= ======= ======
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (unaudited)
Half Year Half Year Year
30-9-2003 30-9-2002 31-3-2003
Eurom Eurom Eurom
Profit attributable to ordinary stockholders 537 472 826
Exchange adjustments (50) (84) (346)
---------- ---------- ----------
Total gains recognised in the period 487 388 480
======= ======= ======
GROUP CASH FLOW STATEMENT (UNAUDITED)
Half Year Half Year Year
30-9-2003 30-9-2002 31-3-2003
OPERATING CASH FLOWS Eurom Eurom Eurom
Net cash flow from operating activities 763 852 1,109
Returns on investment and servicing of finance (39) (79) (181)
Taxation (66) (91) (180)
Capital expenditure and financial investment (788) (1,575) (1,367)
Acquisitions and disposals 24 (176) (172)
Equity dividends paid (236) (216) (349)
Financing (226) (174) 205
----------- ----------- ----------
Decrease in cash (568) (1,459) (935)
====== ====== ======
1 ACCOUNTING POLICIES
The accounting policies as set out on pages 50 to 53 of the Report and
Accounts for the year ended 31 March 2003 are unchanged, other than a
change to the capitalisation of procurement fees and amortisation of
these costs in line with actual product experience, which is being
adopted on a prospective basis for sales from 1 April 2003; the effect
in the Group profit and loss account is a gain of Euro12.5m in the half
year.
UITF Abstract 37 "Purchases and Sales of Own Shares" was issued on 28
October 2003 and is effective for accounting periods ending on or after
23 December 2003. "Own Shares", previously shown as assets are now
included as a deduction from equity in arriving at Stockholders Funds.
As a consequence the financial statements at 30 September 2002 and 31
March 2003 have been restated leading to a decrease in the opening
balance of stockholders' funds of Euro27m.
2 SEGMENTAL ANALYSIS
The segmental analysis of the Group's results and financial position is
set out below by geographic segment and by business class. For the
geographic analysis Republic of Ireland includes profits generated in
the International Financial Services Centre. Turnover is defined as
interest income, non interest income and income from associates and
joint ventures. Turnover by business class is not shown. The Group has
six business classes. The analysis of results by business class is based
on management accounts information. Net assets are included below in
order to comply with SSAP 25. The segmental allocation of liabilities
necessitates the allocation of capital on a risk related basis which is
in some cases necessarily subjective. The basis of capital allocation to
segments is based on an economic capital basis which incorporates a
broader range of business risks. The Directors believe that it is more
meaningful to analyse total assets and the result of this analysis is
therefore also included in the tables.
2 SEGMENTAL ANALYSIS (continued)
(a) Geographical Segment Half Year 30-9-2003
Republic of United Kingdom Rest of Total
Ireland World
Eurom Eurom Eurom Eurom
Turnover 1,346 1,043 73 2,462
====== ====== ====== ======
Profit before exceptional items 463 174 19 656
====== ====== ======
Exceptional Items 28
Grossing up (1) (14)
--------
Profit before taxation 670
======
Net assets 2,317 1,516 441 4,274
====== ====== ====== ======
Total assets (2) 81,345 42,866 2,354 126,565
====== ====== ====== ======
Half Year 30-9-2002 (restated)
Republic of United Rest of Total
Ireland Kingdom World
Eurom Eurom Eurom Eurom
Turnover 1,319 1,169 60 2,548
====== ====== ====== ======
Profit before exceptional items 445 162 17 624
====== ====== ======
Exceptional Items (22)
Grossing up (1) (22)
--------
Profit before taxation 580
======
Net assets 2,593 1,677 166 4,436
====== ====== ====== ======
Total assets (2) 68,832 40,421 2,276 111,529
====== ====== ====== ======
2 SEGMENTAL ANALYSIS (continued)
(a) Geographical Segment Year 31-3-2003 (Restated)
Republic of United Kingdom Rest of World Total
Ireland
Eurom Eurom Eurom Eurom
Turnover 2,621 2,272 148 5,041
===== ===== ==== =====
Profit before exceptional item 869 319 43 1,231
===== ===== ====
Exceptional items (164)
Grossing up (1) (54)
--------
1,013
Profit before taxation =====
Net assets 2,338 1,448 374 4,160
===== ===== ===== =====
Total assets (2) 71,202 38,941 2,224 112,367
===== ===== ===== =====
(b) Business Half Year 30-9-2003
Segments
Retail BOI Life Wholesale UK Financial Asset Group and Total
Republic of Financial Services Management Central
Ireland Services Services
Eurom Eurom Eurom Eurom Eurom Eurom Eurom
Net interest 434 - 149 294 2 (15) 864
income
Other income 126 73 169 115 125 5 613
-------- ------- -------- -------- -------- -------- --------
Total operating 560 73 318 409 127 (10) 1,477
income
Administrative 338 - 121 228 69 38 794
expenses
Provisions for 27 - 18 1 - - 46
bad and doubtful
debts
-------- ------- -------- -------- -------- -------- --------
Operating Profit 195 73 179 180 58 (48) 637
Income from (1) - 20 - - - 19
associated
undertakings &
joint ventures
-------- ------- -------- -------- -------- -------- --------
Profit before 194 73 199 180 58 (48) 656
Exceptional Items
===== ==== ===== ===== ===== =====
Exceptional Items 28
Grossing up (1) (14)
--------
Profit before 670
taxation
=====
Net assets 1,129 95 785 1,561 378 326 4,274
===== ==== ===== ===== ===== ===== =====
Total assets (2) 31,797 6,734 58,631 33,426 1,759 8,423 140,770
===== ==== ===== ===== ===== ===== =====
Total Risk 16,057 - 21,020 20,826 147 500 58,550
Weighted Assets
===== ==== ===== ===== ===== ===== =====
2 SEGMENTAL ANALYSIS (continued)
Half Year 30-9-2002 (restated)
(b) Business Retail BOI Wholesale UK Financial Asset Group and Total
Segments Republic of Life Financial Services Management Central
Ireland Services Services
Eurom Eurom Eurom Eurom Eurom Eurom Eurom
Net interest 415 - 135 312 2 (2) 862
income
Other income 124 56 177 126 108 23 614
-------- ------- -------- -------- -------- -------- --------
Total operating 539 56 312 438 110 21 1,476
income
Administrative 324 - 123 255 54 58 814
expenses
Provisions for 26 - 13 17 - - 56
bad and doubtful
debts
-------- ------- -------- -------- -------- -------- --------
Operating Profit 189 56 176 166 56 (37) 606
Income from - - 19 - - (1) 18
associated
undertakings &
joint ventures
-------- ------- -------- -------- -------- -------- --------
Profit before 189 56 195 166 56 (38) 624
Exceptional Items
===== ==== ===== ===== ===== =====
Exceptional Items (22)
Grossing up (1) (22)
--------
Profit before 580
taxation
=====
Net assets 1,017 88 642 1,688 144 857 4,436
===== ==== ===== ===== ===== ===== =====
Total assets (2) 26,689 5,650 46,930 31,985 1,254 6,996 119,504
===== ==== ===== ===== ===== ===== =====
Total Risk 14,827 - 19,555 20,127 384 325 55,218
Weighted Assets
===== ==== ===== ===== ===== ===== =====
Year 31-3-2003 (restated)
Retail BOI Wholesale UK Financial Asset Group and Total
Republic of Life Financial Services Management Central
Ireland Services Services
Eurom Eurom Eurom Eurom Eurom Eurom Eurom
Net interest 841 - 294 615 5 1 1,756
income
Other income 242 87 351 271 233 31 1,215
---------- ------- ---------- ---------- ---------- -------- ----------
Total operating 1,083 87 645 886 238 32 2,971
income
Administrative 655 - 255 513 125 114 1,662
expenses
Provisions for 51 - 28 21 - - 100
bad and doubtful
debts
---------- ------- ---------- ---------- ---------- -------- ----------
Operating Profit 377 87 362 352 113 (82) 1,209
Income from (2) - 27 - - (3) 22
associated
undertakings &
joint ventures
---------- ------- ---------- ---------- ---------- -------- ----------
Profit before 375 87 389 352 113 (85) 1,231
exceptional item
====== ==== ======= ====== ======= =====
Exceptional items (164)
Grossing up (1) (54)
----------
Profit before 1,013
taxation
======
Net assets 1,016 88 652 1,467 344 593 4,160
====== ==== ======= ====== ======= ===== ======
Total assets (2) 28,269 5,728 51,241 31,222 1,611 7,583 125,654
====== ==== ======= ====== ======= ===== ======
Total Risk 14,881 - 19,669 19,512 143 387 54,592
Weighted Assets
====== === ======= ====== ======= ===== ======
2 SEGMENTAL ANALYSIS (continued)
1. The Group undertakes tax based transactions at rates which are less than
normal market rates in return for tax relief arising from incentives for
industrial development and other reliefs. To assist in making valid
comparison of pre-tax performance, the analysis of business unit performance
is grossed up.
(2) Total assets include intra-group items of Euro42,067m (September
2002: Euro29,873m, March 2003: Euro36,184m) in business class and Euro27,862m
(September 2002: Euro21,898m, March 2003: Euro22,897m) in geographic segments.
3 OPERATING EXPENSES
Half year Half Year Year
30-9-2002
30-9-2003 31-3-2003
The Group Eurom Eurom Eurom
Staff Costs:
- wages and salaries 405 411 821
- social security costs 35 35 67
- pension costs 29 26 57
- staff stock issue 4 4 9
- severance packages 1 - 1
--------- --------- ----------
474 476 955
Operating lease rentals:
- property 19 15 34
- equipment 1 - 1
Other administrative expenses 216 239 490
--------- --------- ----------
Total administrative expenses 710 730 1,480
--------- --------- ----------
Depreciation and amortisation:
- freehold and leasehold property 8 7 18
- computer and other equipment 67 68 141
- amortisation of goodwill 9 9 23
--------- --------- ----------
Total depreciation and amortisation 84 84 182
--------- --------- ----------
Total operating expenses 794 814 1,662
====== ====== ======
4 EMPLOYEE INFORMATION
The average full time equivalents categorised in line with the business
classes, are as follows:
30-9-2003 30-9-2002 31-3-2003
Retail Republic of Ireland 7,572 7,560 7,501
BOI Life 1,070 1,132 1,111
Wholesale Financial Services 1,709 1,612 1,606
UK Financial Services 5,381 5,540 5,566
Asset Management Services 668 655 673
Group & Central 1,385 2,024 1,757
--------- --------- ---------
17,785 18,523 18,214
====== ====== ======
5 LIFE ASSURANCE
The table below provides an analysis of profits before tax.
Half Year Half Year Year
30-9-2003 30-9-2002 31-3-2003
Eurom Eurom Eurom
New business contribution 19 30 55
Profit from existing business 26 27 56
* expected return 6 5 11
* experience variance
* operating assumption changes 3 5 (2)
Return on shareholder funds 3 5 10
---------- ---------- ----------
Operating profit before tax 57 72 130
Investment variance 11 (32) (49)
Effect of economic assumption changes 19 31 35
---------- ---------- ----------
Contribution from life assurance companies 87 71 116
Less: income adjustment for certain services,
overheads and capital allocations provided by Group companies (14) (15) (29)
---------- ---------- ----------
Life assurance segment, profit before tax 73 56 87
====== ====== ======
6 EXCEPTIONAL ITEMS
In the half year to 30 September 2003, the exceptional items represent
1) The Group completed the sale of its share in the alliance it operated
with State Street Bank which resulted in a profit of Euro33m 2)
Implementation of a business improvement programme in UKFS has commenced
(Euro1m) and 3) Additional costs were incurred in relation to prior year
exceptional items (Euro4m).
In the half year to 30 September 2002, the exceptional items represent
the loss on the disposal of Active Business Services and the termination
of the joint venture with Perot Systems. In the year to 31 March 2003,
the exceptional items represent the loss on disposal of Active Business
Services Euro12.4m, the termination of the joint venture with Perot Systems
Euro8.6m and the costs associated with the rationalisation of the UK
advice-based businesses Euro143m.
7 TAXATION ON PROFIT ON ORDINARY ACTIVITIES
Half Year Half Year Year
30-9-2003 30-9-2002 31-3-2003
Eurom Eurom Eurom
Irish Corporation tax 62 53 118
Double taxation relief (10) (9) (16)
Foreign taxation 44 47 56
Deferred taxation 4 1 (11)
Share of associated undertakings and joint ventures 6 6 9
Levy on certain financial institutions 14 - 7
---------- ---------- ----------
120 98 163
====== ====== ======
8 EARNINGS PER UNIT OF Euro0.64 ORDINARY STOCK
The calculation of basic earnings per unit of Euro0.64 Ordinary Stock is
based on the profit attributable to Ordinary Stockholders divided by the
weighted average Ordinary Stock in issue.
Half Year Half Year Year
30-9-2003 30-9-2002 31-3-2003
Basic
Profit attributable to Ordinary Stockholders Euro536.8m Euro472.0m Euro825.9m
Weighted average number of shares in issue 988.4m 1,008.3m 1,007.5m
Basic earnings per share 54.3c 46.8c 82.0c
The diluted earnings per share is based on the profit attributable to
Ordinary Stockholders divided by the weighted average Ordinary Stock in
issue adjusted for the effect of all dilutive potential Ordinary Stock.
Half Year Half Year Year
30-9-2003 30-9-2002 31-3-2003
Diluted
Profit attributable to Ordinary Stockholders Euro536.8m Euro472.0m Euro825.9m
Average number of shares in issue 988.4m 1,008.3m 1,007.5m
Effect of all dilutive potential Ordinary Stock 6.5m 10.4m 9.6m
---------- ---------- ----------
994.9m 1,018.7m 1,017.1m
====== ====== ======
Diluted earnings per share 54.0c 46.3c 81.2c
The calculation of alternative earnings per unit of Euro0.64 Ordinary Stock
is based on the profit attributable to Ordinary Stockholders before
goodwill amortisation and exceptional items divided by the weighted
average Ordinary Stock in issue.
Half Year Half Year Year
30-9-2003 30-9-2002 31-3-2003
Alternative
Basic 54.3c 46.8c 82.0c
Goodwill amortisation 0.7c 0.9c 2.0c
Exceptional items (2.3c) 2.2c 15.2c
---------- ---------- ----------
Alternative earnings per share 52.7c 49.9c 99.2c
====== ====== ======
9 LOANS AND ADVANCES TO CUSTOMERS
30-9-2003 30-9-2002 31-3-2003
Eurom Eurom Eurom
Loans and advances to customers 58,303 54,410 53,946
Loans and advances - finance leases 2,205 2,355 2,226
Hire purchase receivables 1,368 1,176 1,195
---------- ---------- ----------
61,876 57,941 57,367
Provision for bad and doubtful debts (note 10) (467) (501) (480)
---------- ---------- ----------
61,409 57,440 56,887
======= ======= ======
10 PROVISION FOR BAD AND DOUBTFUL DEBTS
30-9-2003 30-9-2002 31-3-2003
Eurom Eurom Eurom
Opening balance 480 500 500
Exchange adjustments (3) (8) (30)
Charge against profits 46 56 100
Amounts written off (60) (53) (96)
Recoveries 4 6 6
----------- ----------- ----------
Closing balance 467 501 480
======= ======= ======
All of which relates to loans and advances to customers
Provisions at end of period:
- specific 176 150 170
- general 291 351 310
----------- ----------- ----------
467 501 480
======= ======= ======
The Group's general provision, which provides for the latent loan losses
in the portfolio of loans and advances, comprises an element relating to
grade profiles of Euro178m (Sept 2002: Euro172m, March 2003: Euro175m) and a non
designated element, for prudential purposes of Euro113m (Sept 2002: Euro179m,
March 2003: Euro135m). The non designated element will be offset, in
certain pre-defined circumstances, against specific loan losses as they
crystallise in future years.
11 CUSTOMER ACCOUNTS
30-9-2003 30-9-2002 31-3-2003
Eurom Eurom Eurom
Current accounts 10,672 9,494 9,646
Demand deposits 19,827 20,663 20,072
Term deposits and other products 19,116 18,768 18,331
Other short-term borrowings 636 484 447
----------- ----------- ----------
50,251 49,409 48,496
====== ====== ======
12 CAPITAL STOCK
30-9-2003 30-9-2002 31-3-2003
Allotted and fully paid Eurom Eurom Eurom
Equity
977.1m units of Euro0.64 of Ordinary Stock 625 646 637
73.0m units of Euro0.64 of Treasury Stock 47 26 35
Non equity
1.9m units of Non-Cumulative Preference Stock of Stg#1 each 3 3 3
3.0m units of Non-Cumulative Preference Stock of Euro1.27 each 4 4 4
---------- ---------- ----------
679 679 679
====== ====== ======
13 RESERVES
30-9-2003 30-9-2002 31-3-2003
(restated) (restated)
Eurom Eurom Eurom
Stock premium account
Opening balance 765 773 773
Exchange adjustments (1) (2) (8)
---------- ---------- ----------
Closing balance 764 771 765
====== ====== ======
Capital reserve
Opening balance 436 397 397
Transfer from revenue reserves 53 53 44
Exchange adjustments - (2) (5)
---------- ---------- ----------
Closing balance 489 448 436
====== ====== ======
Profit and loss account
Opening balance 2,099 2,116 2,116
Profit retained 341 286 411
Exchange adjustments (49) (79) (328)
Ordinary stock issued under employee stock scheme 23 4 6
Ordinary stock buy-back (249) - (133)
Transfer from revaluation reserve 1 - 22
Purchase of stock by subsidiary (4) - -
Goodwill written back on disposal of subsidiary - - 5
Transfer from goodwill reserve - 4 -
---------- ---------- ----------
Closing balance 2,162 2,331 2,099
====== ====== ======
Revaluation reserve
Opening balance 181 208 208
Exchange adjustments - (1) (5)
Transfer to revenue reserve on sale of property (1) - (22)
---------- ---------- ----------
Closing balance 180 207 181
====== ====== ======
14 GROUP FINANCIAL INFORMATION FOR US INVESTORS
Half Year Half Year Year
Consolidated Net Income 30-9-2003 30-9-2002 31-3-2003
Eurom Eurom Eurom
Net income under Irish GAAP 537 472 826
Depreciation (1) (1) (2)
Software development costs 2 2 5
Goodwill 9 9 6
Pension costs (25) (17) (44)
Long-term assurance policies (27) (46) (39)
Group Transformation Programme (8) (16) (23)
Leasing (12) (2) (38)
Stock Based Compensation (1) (1) (2) (3)
Derivatives (116) 36 75
Other (2) - 1
Deferred tax effect on these adjustments 23 7 3
--------- --------- ----------
Profit under US GAAP 379 442 767
====== ====== ======
Earnings per unit of Euro0.64 Ordinary Stock under US GAAP
- basic 38.3c 43.8c 76.1c
====== ====== ======
- diluted 38.1c 43.4c 75.4c
====== ====== ======
Consolidated Total Stockholders' Funds 30-9-2003 30-9-2002 31-3-2003
Eurom Eurom Eurom
Total stockholders' funds including non equity interests 4,274 4,436 4,160
Property less related depreciation (348) (350) (347)
Software development costs (2) (6) (4)
Goodwill 428 451 422
Debt securities - available for sale 95 108 113
Pension costs (16) 20 (12)
Long-term assurance policies (368) (370) (359)
Dividends 143 133 238
Leasing (58) (9) (45)
Group Transformation Programme 4 18 11
Derivatives (114) (37) 2
Other (21) 1 (20)
Deferred taxation on these adjustments 44 19 30
--------- --------- ----------
Consolidated stockholders' funds including non equity interests 4,061 4,414 4,189
under US GAAP
====== ====== ======
14 GROUP FINANCIAL INFORMATION FOR US INVESTORS (continued)
Consolidated Total Assets
30-9-2003 30-9-2002 31-3-2003
Eurom Eurom Eurom
Total assets under Irish GAAP 98,703 89,631 89,470
Property less related depreciation (348) (350) (347)
Goodwill 455 489 449
Software development costs (2) (6) (4)
Debt securities - available for sale 95 108 113
Pension costs (12) 24 (7)
Acceptances 31 66 81
Long-term assurance policies (368) (370) (359)
Special purpose entities 1,107 982 1,019
Derivatives 987 1,307 1,214
Other (77) (75) (76)
---------- ---------- ----------
Total assets under US GAAP 100,571 91,806 91,553
======= ======= ======
Consolidated Total Liabilities and Stockholders' Funds
30-9-2003 30-9-2002 31-3-2003
Eurom Eurom Eurom
Total liabilities and stockholders' funds including non equity 98,703 89,631 89,470
interests under Irish GAAP
Stockholders' funds (US GAAP adjustment) (213) (22) 29
Dividends (143) (133) (238)
Special purpose entities 1,107 982 1,019
Acceptances 31 66 81
Leasing 58 9 45
Group Transformation Programme (4) (18) (11)
Derivatives 1,101 1,344 1,212
Deferred taxation on these adjustments (65) (55) (51)
Other (4) 2 (3)
------------ ------------ ----------
Total liabilities and stockholders' funds including non equity 100,571 91,806 91,553
interests under US GAAP
======= ======= ======
(1)The Group accounts for stock based compensation in accordance with
APB25 "Accounting for stock issued to Employees" and the charge as noted
above is Euro1m. The Group in its 20-F filing adopts the disclosure
provisions of SFAS123 "Accounting for Stock Based Compensation" and on
this basis had a fair value basis of accounting for these schemes been
applied based on the fair values at the grant date the additional
expense in the period to 30 September 2003 would have been Euro4m and the
pro forma net profit under US GAAP would have been Euro375m. The total cost
of these schemes therefore for the six month period to 30 September
2003, not included in the Irish GAAP Profit and Loss Account, amounted
to Euro5m of which Euro2m approximately relates to the Group Employee
Sharesave Scheme.
15 AVERAGE BALANCE SHEET AND INTEREST RATES
The following tables show the average balances and interest rates of
interest earning assets and interest bearing liabilities for each of the
half years ended 30 September 2003 and 2002 and the year ended 31 March
2003. The calculations of average balances are based on daily, weekly or
monthly averages, depending on the reporting unit. The average balances
used are considered to be representative of the operations of the Group.
Rates for the half years are annualised.
Half Year Half Year Year
30-9-2003 30-9-2002 (restated) 31-3-2003
Average Interest Rate Average Interest Rate Average Interest Rate
Balance Balance Balance
Eurom Eurom % Eurom Eurom % Eurom Eurom %
ASSETS
Loans to
banks
Domestic 8,889 104 2.3 6,601 110 3.4 6,835 196 2.9
offices
Foreign 435 18 8.3 818 9 2.2 406 12 2.9
offices
Loans to
customers
(1)
Domestic 27,877 682 4.9 24,943 702 5.6 25,140 1,419 5.6
offices
Foreign 28,102 670 4.8 28,803 770 5.3 28,533 1,503 5.3
offices
Central government
and other eligible
bills
Domestic 7 - - 6 - - 7 - -
offices
Foreign - - - - - - - - -
offices
Debt
Securities
Domestic 8,072 120 3.0 8,439 141 3.3 8,132 279 3.4
offices
Foreign 1,547 34 4.4 1,375 34 4.9 1,285 65 5.1
offices
Instalment
credit
Domestic 573 18 6.3 451 16 7.1 451 32 7.1
offices
Foreign 803 29 7.2 681 28 8.2 708 56 7.9
offices
Finance
lease
receivables
Domestic 1,995 61 6.1 2,312 63 5.4 2,238 126 5.6
offices
Foreign 190 2 2.1 74 2 4.3 75 3 4.0
offices
Total
interest
earning
assets
Domestic 47,413 985 4.2 42,752 1,032 4.8 42,803 2,052 4.8
offices
Foreign 31,077 753 4.8 31,751 843 5.3 31,007 1,639 5.3
offices
--------- -------- ---- ----------- --------- ----- ---------- --------- -----
78,490 1,738 4.4 74,503 1,875 5.0 73,810 3,691 5.0
Allowance (487) (485)
for loan (505)
losses
Non 17,084 13,235 15,915
interest
earning
assets
(2)
--------- -------- ---- ----------- --------- ----- ---------- --------- -----
Total 95,087 1,738 3.7 87,233 1,875 4.3 89,240 3,691 4.1
Assets
====== ====== === ====== ====== === ====== ====== ====
15 AVERAGE BALANCE SHEET AND INTEREST RATES (CONTINUED)
Half Year Half Year Year
30-9-2003 30-9-2002 (restated) 31-3-2003
Average Interest Rate Average Interest Rate Average Interest Rate
Balance Balance Balance
Eurom Eurom % Eurom Eurom % Eurom Eurom %
liabilities and
stockholders'
equity
Deposits and
Customer Accounts
Domestic offices 36,063 305 1.7 30,913 378 2.4 31,462 691 2.2
Foreign offices 20,899 362 3.5 24,039 430 3.6 23,297 844 3.6
Debt securities in
issue
Domestic offices 7,754 85 2.2 5,742 84 2.9 6,233 168 2.7
Foreign offices 2,638 45 3.4 2,582 55 4.3 2,559 103 4.0
Subordinated
liabilities
Domestic offices 1,306 38 5.8 1,526 43 5.6 1,431 82 5.7
Foreign offices 1,373 51 7.4 907 36 7.9 928 74 8.0
Total interest
bearing
liabilities
Domestic offices 45,123 428 1.9 38,181 505 2.6 39,126 941 2.4
Foreign offices 24,910 458 3.7 27,528 521 3.8 26,784 1,021 3.8
-------- -------- ------ --------- -------- ------ -------- -------- ----
70,033 886 2.5 65,709 1,026 3.1 65,910 1,962 3.0
Non interest
bearing
liabilities
Current accounts 6,958 6,417 6,547
Other non interest 13,811 10,768 12,336
bearing
liabilities(2)
Stockholders'
equity including 4,285 4,339 4,447
non equity
interest
-------- -------- ------ --------- -------- ------ -------- -------- ----
Total liabilities 95,087 886 1.9 87,233 1,026 2.4 89,240 1,962 2.2
and stockholders'
equity
====== ====== === ====== ====== === ====== ====== ====
(1) Loans to customers include non accrual loans and loans
classified as problem loans.
(2) In accordance with Financial Reporting Standard 2, the
balance sheets of the life assurance companies have been
consolidated and are reflected under "Non Interest Earning
Assets" and "Non Interest Bearing Liabilities".
16 RATES OF EXCHANGE
Principal rates of exchange used in the preparation of the accounts are
as follows:
30-9-2003 30-9-2002 31-3-2003
Closing Average Closing Average Closing Average
Euro/US$ 1.1652 1.1380 0.9860 0.9641 1.0895 1.0051
Euro/Stg# 0.6986 0.7005 0.6295 0.6333 0.6896 0.6460
17 CAPITAL ADEQUACY DATA
30-9-2003 30-9-2002 31-3-2003
(restated) (restated)
Eurom Eurom Eurom
Adjusted capital base
Tier 1 4,454 4,099 4,377
Tier 2 2,504 2,506 2,442
-------- -------- --------
6,958 6,605 6,819
Supervisory deductions 799 733 752
-------- -------- --------
6,159 5,872 6,067
===== ===== =====
Risk weighted assets
Banking Book 56,202 53,278 52,546
Trading Book 2,348 1,940 2,046
-------- -------- --------
58,550 55,218 54,592
===== ===== =====
Capital Ratios
Tier 1 Capital 7.6% 7.4% 8.0%
Total Capital 10.5% 10.6% 11.1%
18 THE ACCOUNTS WERE APPROVED BY THE COURT OF DIRECTORS ON 12 NOVEMBER 2003.
Independent review report to The Governor and Company of the Bank of Ireland
Introduction
We have been instructed by the Bank to review the financial information which
comprises the Group Profit and Loss Account, the Group Balance Sheet, the
Reconciliation of Movements in Stockholders' funds, the Statement of Total
Recognised Gains and Losses, the Group Cash Flow Statement and the Notes
thereto. We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the Court of Directors. The
Directors are responsible for preparing the interim report in accordance with
the Listing Rules of the Irish Stock Exchange which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board applicable in Ireland. A review consists
principally of making enquiries of management and applying analytical procedures
to the financial information and underlying financial data, and based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in
accordance with Auditing Standards applicable in Ireland and, therefore,
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information. This report has been
prepared for and only for the Bank for the purpose of the Listing Rules of the
Irish Stock Exchange and for no other purpose. We do not, in producing this
report, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Review conclusion
On the basis of our review, we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2003.
PricewaterhouseCoopers
Chartered Accountants
Dublin
12 November 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ZLLFFXFBLFBE