Bank of Ireland 2022 Interim Results
Structural hedge, liquid assets, net interest
margin and negative interest rates
Structural hedge¹
Liquid assets²
•
€31.0bn
€38.5bn
Average
volume
€35.1bn
€38.3bn
€46m
€41m
€18m
€12m
(€24m)
Interest
(€28m)
Income
€28m
€29m
+
H1 21
GBP
H1 22
EUR
H121
NIM movement
H122
Liquid Asset interest income
Application of NIR delivering
reduction in funding costs
€8.5bn
c.7bps (c.9bps)
1.94%
1.92%
Year-end
deposit
TLTRO -8bps
TLTRO
-19bps
volumes
on negative
rates
€30m
1.86%
1.73%
€14.8bn
€47m
FY 21
Pricing
discipline
& cost of
deposit
Liquid asset
growth/
lower yield
H1 22
H1 21
Reduction in funding costs
H1 22
1 Gross interest income from fixed leg of hedging swap
2 Excludes any impact from TLTRO on liquid assets
Bank of Ireland 2022 Interim Results
Structural hedge & liquid assets
Structural hedge and liquid asset income reducing as
a result of the negative interest rate environment
-
Avg structural hedge yield fell from c.26bps to
c.21bps between H1 21 and H1 22
Decline in liquid asset income primarily from
c. €7.5bn increase in liquid assets (reflecting retail
deposit growth), partially offset by increase in avg
3 month Euribor rate (c.10bps)
Net interest margin (NIM)
•
Underlying NIM -2bps vs FY 21
-
Pricing discipline on lending and deposits +c.7bps
contribution to NIM
Growth in volume of liquid assets (ex TLTRO) and
lower yields -c.9bps impact on NIM
TLTRO mechanically lowers NIM by 19bps
Negative interest rates (NIR)
•
Application of NIR to deposit customers expanded
during 2021, minimal attrition during H1 22
Volume of customer deposits on negative rates
was €14.8bn at June 2022
Reduction in funding costs of €47m in H1 22
Bank of Ireland
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