IAS19 Defined Benefit Pension + Mortgage Portfolio Analysis
Bank of Ireland
Wealth and Insurance¹.
-
IFRS 17 application and restatement of H122
H1 2022
H1 2022 H1 2023
(€m IFRS 4) (€m IFRS 17) (€m IFRS 17)
Income
123
76
162
Expenses
(82)
(45)
(107)
Operating contribution
41
32
55
Investment valuation movement
(102)
(77)
22
Underlying contribution
(61)
(44)
77
Dec 2022
AUM
(€bn)
Jun 2023
(€bn)
Davy
18
20
NIAC
21
22
Total AUM
39
42
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•
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On 1 Jan 2023, the IFRS 17 accounting standard related to insurance contracts
became effective, replacing IFRS 4. This has a material impact on the recognition,
measurement, presentation and disclosure of the insurance business in the
Group's financial statements. The application of IFRS 17 does not impact Davy,
the economic value created from the Wealth and Insurance division or the ability
of the Group to upstream dividends from the NIAC subsidiary. Cash flows and
capital generation from the W&l business remain unchanged
Embedded value of Wealth division (excluding Davy) increased to €1.24bn in
H123 from €1.17bn in Dec 2022
Following the application of IFRS 17, Wealth and Insurance income for H122 has
been restated to €76m (from €123m under IFRS 4) and operating expenses have
been restated to €44m (from €82m under IFRS 4)
H123 growth in operating income and operating expenses reflect six months
contribution from Davy (vs one month in H122), as well as underlying business
momentum; market movements have resulted in a positive investment valuation
movement of €22m for H123
The impact of the introduction of IFRS 17 on shareholders' equity was €371m at
the transition date of 1 Jan 2022 and €410m at the application date of 1 Jan 2023
IFRS 17 has introduced contractual service margin (CSM) which represents the
unearned profit of a group of insurance and reinsurance contracts which is
released in line with insurance service provided. The CSM of the Group increased
by €8m to €561m during H1 2023. There was a c.€38m increase in CSM driven by
new business, positive persistency, and positive market movements. €30 million
CSM was released to the income statement for insurance services provided
1 Includes New Ireland and Davy
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