2018 Credit Presentation
Costs have reduced by 3% / €48m
Operating expenses to reduce further
€1,796m
€1,739m
€104m
2017
€113m
2018
Operating expenses Transformation Investment charge
2019
2018 Credit Presentation
Transformation of cost base
•
Operating expenses (before levies and regulatory charges) of
€1,852m reduced by €48m (3%) vs. 2017
Expect operating expenses, including transformation
investment charge, to reduce every year to €1.7bn in 2021
Operating expenses: €1,739m
•
•
Total staff costs decreased by €32m vs. 2017 primarily
reflecting lower average staff numbers partly offset by impact
of wage inflation of c.2.5% under the Group Career and
Reward framework; wage inflation of c.2.6% agreed for 2019
Other costs have decreased by €68m vs. 2017 reflecting
strategic sourcing and other efficiencies from business model
initiatives across the businesses
Expected increase in depreciation charge of €43m reflects
investment in technology
Transformation Investment charge: €113m
• Total transformation investment in 2018 of €306m:
-
€113m charged as Transformation Investment to the
income statement (37%)
€100m capitalised as intangible asset (33%)
€93m charged as non-core restructuring costs (30%)
Levies and Regulatory charges: €101m
Expect levies and regulatory charges to total €115m - €120m
for 2019
FY 2017 FY 2018
(Єm)
(€m)
Total staff costs
900
868
•
- Staff costs
752
721
- Pension costs
148
147
Other costs
727
659
Depreciation
169
212
Operating Expenses
1,796
1,739
Transformation Investment charge¹
104
113
Operating Expenses (before levies and
1,900
1,852
regulatory charges)
Levies and Regulatory charges
99
101
Total Operating Expenses
1,999
Average staff numbers
Cost-income ratio²
11,196
65%
1,953
10,595
•
65%
1 Transformation Investment charge was previously disclosed as 'Core Banking Platform Investment charge',
it has been updated to include the broader scope of Transformation covering Culture, Systems and
Business Model for 2017
2 See Slide 51 for calculation
Bank of Ireland
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