Bank of Ireland H1 2020 Credit Presentation
Structural Hedge
Interest income on structural hedge¹
Average structural
hedge volume
1.5%
1.0%
0.5%-
0.0%
-0.5% +
€32.7bn
€85m
Overview
Bank of Ireland H1 2020 Credit Presentation
•
€35.8bn
Structural hedging is used to help mitigate volatility in
earnings from interest rate movements
€68m
€51m
€34m
€34m
H1 2019
EUR GBP
EUR structural hedge
€34m
H1 2020
Income from structural hedging has supported interest
income as market rates have declined
Average structural hedge volume in H1 2020 of €35.8bn
(EUR 84%, GBP 16%):
c.75% of equity and credit balances hedged
Weighted average life of hedges is c.3.5 years
c.15% of existing hedges are re-hedged annually
Hedging of incremental growth in credit balances paused in
H1 2020
Interest income of €68m from structural hedge in H1 2020;
c.6% of Group's net interest income (c.8% in 2019)
Impact of lower interest rate environment incorporated in
net interest income and NIM 2020 guidance
Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jun-20
- EUR structural hedge yield External EUR 7yr swap rate
1 Gross interest income from fixed leg of hedging swap
51bps
Bank of Ireland
43
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