IAS19 Defined Benefit Pension + Mortgage Portfolio Analysis
FY23
Outlook
Impairment charge of €158m in line with expectations
•
IFRS 9 models and management adjustments (PMAs)
(€28m) charge
Charge of (€53m) related to model updates and updated IFRS 9
macroeconomic assumptions
PMA gain of €25m (Jun 2023 stock of €35m) in relation to NPES
earmarked for disposal
Loan loss experience and portfolio activity
(€130m) charge
Charge of (€97m) from portfolio activity, reflecting net losses on case
specific credit events
.
Day 1 charge of (€17m) related to KBCI portfolio acquisition
HY 2023
Bank of Ireland
Additional assessment on affordability' of residential mortgage and
consumer loan portfolios, reflecting higher interest rates (€16m net charge)
Prudent approach applied in setting macroeconomic assumptions²
Ireland
United Kingdom
30 June 2023
2023
2024
2023
2024
Probability Weighted Scenarios
GDP growth
4.8%
3.6%
-0.4%
0.1%
Probability weighted scenarios used for provisioning apply
more conservative assumptions vs central scenario (consensus
of external forecasts)
Unemployment
4.6%
5.3%
4.5%
5.2%
Inflation
5.3%
3.2%
7.3%
3.1%
House Price Index
-6.5%
-2.4%
-9.6%
-5.4%
Weightings to downside scenarios increased by 5% to 45% vs
Dec 2022
Commercial Real Estate prices
-11.1%
-8.0%
-8.8%
-7.1%
FY23 impairment charge expected to be mid-30s bps, subject to no material change in economic conditions or outlook
1 SICR (Significant Increase in Credit Risk) assessment under IFRS 9. Total stock of SICR assessments included in ILA of residential mortgage and consumer portfolios of €28m
2 See slide 46 for 2023-2027 macro-economic assumptions used in IFRS 9 models
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