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Bank of Ireland 'on path to recovery'

14/08/13

The Bank of Ireland has announced that it is moving towards recovery following four successive years of losses, with chief executive Richie Boucher suggesting the organisation could be close to weaning itself off liquidity funding from the European Central Bank (ECB).

"A lot of the heavy lifting is now complete. Funding provided by the ECB is quickly approaching normalised levels," he declared.

With the Bank of Ireland one of the country's most important economic institutions, this will come as good news to other financial services firms in Dublin hoping that the country can put the worst of the crash behind it.

"We now have a normalised bank which has strong momentum towards profitability ... We are in the more pleasant place of having the challenges of ordinary businessmen and women," added Mr Boucher.

In the two years since the bank's recapitalisation it has restructured its groups and attempted to focus on its core Irish market, with a report from Davy stockbrokers indicating that the organisation could return to profit in 2014 if it maintains its current positive trajectory.

Pre-tax losses were less than half of those seen in 2012, indicating that the bank is making major strides when it comes to plugging up its various holes.

The improvement is most obvious when looking at key metrics such as capital, total income and net interest margins - all of these improved over the last 12 months.

But is the Bank of Ireland's recovery a special case, given its extensive ECB funding, or could it signal a return to expansion for financial services in the Irish capital?

According to Financial Services Ireland, the sector employs some 32,000 people in Dublin and contributes 7.4 per cent of Irish GDP, indicating its importance to the country's economy.

While it remains to be seen if there will be any major shift, the Bank of Ireland's recovery has certainly sent waves of renewed optimism throughout the industry.

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