Bank of Ireland 2021 Interim Results - Debt Investor Presentation
Structural hedge, liquid assets and
negative interest rates
Structural hedge¹
Liquid assets²
•
Average
volume
€35.6bn
€35.1bn
€26.6bn
€31.0bn
€68m
€46m
€34m
€17m
Interest
Income
€28m
-€24m
€34m
€18m
+
H
H1 20
H1 21
H1 20
H1 21
EUR GBP
Application of negative interest rates
delivering reduction in funding costs
Period-end
deposit volume on
negative rates
€3.3bn
€8.5bn
€8.5bn
€30m
€11m
H1 20
€20m
H2 20
H1 21
1 Gross interest income from fixed leg of hedging swap
2 Excludes any impact from TLTRO on liquid assets
H
Bank of Ireland 2021 Interim Results - Debt Investor Presentation
Structural hedge & liquid assets
Interest income from structural hedge and liquid assets
reducing as a result of the negative interest rate environment
-
Average structural hedge yield fell from c.38bps to c.26bps
between H1 2020 and H1 2021
The decline in liquid asset income arises primarily from
i) a reduction in average 3 month Euribor rate (c.20bps) and
ii) higher ECB balances (c. €3.5bn)
Negative interest rates
•
•
•
As a mitigant to the impacts of the negative interest rate
environment above, the application of negative interest rates
to non-personal customers was expanded further during 2021
Volume of customer deposits on negative rates was €8.5bn
at Jun 2021 reflecting some volume attrition.
The threshold for the application of negative rates will be
reduced for non-personal customers from €2.5m to €1m
during Q3 2021 with further expansion to high net worth
personal customers with balances >€1m during Q4 2021
The Group expects c.€15bn of customer deposits will
attract a negative rate by Dec 2021
Bank of Ireland
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