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Irish Times
21 hours ago
- Business
- Irish Times
Corporate results boost European shares
European equities edged higher on Tuesday, lifted by a slew of corporate results, while investors mulled over the new trade deal outline between Washington and Brussels. The pan-European Stoxx 600 index closed up 0.33 per cent. DUBLIN The Iseq All-Share index closed up just 0.03 per cent to 11,626.82. Bank of Ireland fell despite raising its net interest income forecast on Tuesday as investors baulked at a spike in bad loan provisions . Its shares slumped 4.54 per cent, weighing down the index and the sector. READ MORE In a mixed day for the banks, AIB led the gains, rising 1.39 per cent to €6.93 and Permanent TSB fell 0.98 per cent. Mincon, the small cap engineering tools group, performed strongly on the day, rising 2.63 per cent to €0.39 and healthcare services group Uniphar topped the index rising 3.43 per cent. Greencoat Renewables weighed down the index, falling 2.38 per cent and Kenmare Resources dropped 2.2 per cent. LONDON The FTSE 100 ticked up slightly, adding 0.6 per cent, rising to 9,136.32. Heavyweight bank stocks advanced 1.5 per cent, tracking gains in European peers. Barclays gained 2.8 per cent after the British lender's first-half profit rose by a better-than-expected 23 per cent. Bankers Standard Chartered announced that they have signed a deal to use Alibaba Cloud's technologies for the use of Artificial Intelligence financial sector. The stock gained 2.32 per cent. Pharmaceutical company, AstraZeneca beat its second-quarter profit forecasts buoyed by sales of cancer, heart and kidney disease drugs and strong demand in the US. The stock added 3.41 per cent. The company behind the Warhammer games franchise, Games Workshop surged 5.44 per cent to top the FTSE 100 index. The miniature wargames maker reported a nearly 30 per cent jump in annual pre-tax profit. Entain rose 1.04 per cent after the company's U.S. sports-betting joint venture with MGM Resorts called BetMGM raised its full-year 2025 revenue and core earnings forecast. Chemical company Croda International fell to the bottom of the index, closing down 10.38 per cent after reporting first-half sales below estimates. Sneaker and sport fashion retailer JD Sports fell 1.98 per cent EUROPE The European benchmark rose 0.33 per cent on the day. Franco-Italian eyewear group EssilorLuxottica shares jumped 6.9 per cent after the company reported an increase in first-half operating profit despite a tariff hit. Dutch company Philips rose 9.28 per cent after the healthcare technology group lowered its tariff impact estimates following the U.S.-EU trade deal. Defense stocks Rheinmetall and Hensoldt were among the winners on the day, adding 3.46 per cent and 3.12 per cent respectively Gains were cut limited by big losses including obesity drugmaker Novo Nordisk which cut its full-year sales and operating profit forecasts for the second time this year amid competition from US brands. Shares fell 23.11 per cent. NEW YORK The S&P 500 and the Nasdaq slipped from record highs in mid-afternoon trading on Tuesday as a series of downbeat earnings weighed on the indexes, while investors looked ahead to the U.S. Federal Reserve's policy meeting later in the day. Quarterly results from key Dow components UnitedHealth and Boeing failed to impress investors. Health insurer UnitedHealth fell after a disappointing profit forecast, while Boeing fell despite reporting a smaller second-quarter loss. UnitedHealth's stock has lost nearly half its value from the beginning of 2025. On the day, the healthcare index fell. Whirlpool sank after the home appliances maker slashed its annual earnings forecast and dividend, citing tariff-centric pressures. The US central bank is set to begin its two-day policy meeting later in the day. While the Fed is expected to leave rates unchanged on Wednesday, traders will closely analyze policymakers' remarks to gauge the timing of future moves. According to the CME FedWatch tool, markets are pricing in about a 61.6 per cent chance of a rate cut in September.– Additional reporting, Reuters, PA.
Irish Times
a day ago
- Business
- Irish Times
Bank of Ireland shares fall on US deals business hit by loan losses
Bank of Ireland , whose shares underperformed AIB and the wider European banking market last year as it repeatedly disappointed investors with its net interest income (NII) outlook, had some good news on that front on Tuesday. The bank nudged up its full-year NII forecast by as much as €50 million to €3.3 billion, helped as it grew Irish loans and deposits by 5 per cent each. The group also signalled that its net interest income will grow to more than €3.5 billion by 2027, as it benefits from financial contracts – known as structural hedges – to reduce its exposure to interest rate movement and a recent bond-buying spree. It has increased its bond holdings, mainly European government bonds and mortgage-backed bonds, by €6 billion to €15 billion, as they become more profitable to parking excess deposits with the European Central Bank (ECB). The ECB deposit rate has fallen by half to 2 per cent in the past 13 months. German 10-year bonds, a European benchmark, are currently yielding 2.7 per cent. READ MORE [ Bank of Ireland to cut 260 jobs as first-half profit falls amid tariff-related impairment charge Opens in new window ] Still, investors gave the bank little credit for this on Tuesday – with its stock falling as much as 5.7 per cent in Dublin – as investors baulked at a spike in bad loan provisions. It booked a €137 million impairment charge during the first half, up from €50 million a year earlier. Much of this was down to growing risks in its US acquisitions finance business, which has been hit in recent times as borrowers are squeezed by rising interest rates and a slowing domestic economy. The bank has cut the size of that loan book to $1.5 billion (€1.3 billion) from €2.4 billion in 2022. It also has a form of loan-loss insurance – known as credit risk transfer deals – on the portfolio. But it will have to stomach initial losses likely to come as some of the loans are restructured in a weakening economy. Chief executive Myles O'Grady said the group remains committed to this business, despite the current challenges. He noted that the business has been 'very stable' on the whole over the years, having come through more challenging periods, including the 2008 financial crash, the Covid-19 pandemic and recent inflation crisis. Bank of Ireland has been an active player in this market for the past 25 years, participating in syndicated loan deals with other lenders. The €137 million loan impairment figure for the first half also includes a €40 million general provision to reflect 'the evolving macroeconomic outlook' as the Trump administration's trade policies act as a drag on growth internationally. The higher-than-expected provision and €69 million restructuring charge for the first half – and suggestion that a similar amount will be taken in the final six months of the year – will likely see consensus profit forecasts fall in the near term, according to Christopher Cant, an analyst with Autonomous Research in London. However, he said that medium-term consensus earnings estimates are likely to move higher as analysts grow more comfortable with Bank of Ireland's NII forecast for 2027.
Irish Independent
a day ago
- Business
- Irish Independent
Bank of Ireland to reduce workforce before end of the year, says CEO
Myles O'Grady says AI is contributing to job cuts Staff numbers at Bank of Ireland will be reduced in the second half of the year, including 260 voluntary redundancies, with further cuts likely next year. Myles O'Grady, the bank's group chief executive, has said some of the reduction in headcount is due to the use of artificial intelligence in areas such as financial services, as the bank begins 'to deploy AI in a more meaningful way across the board'.
The Journal
a day ago
- Business
- The Journal
Bank of Ireland to cut 260 jobs by end of the year, with further redundancies expected
BANK OF IRELAND expects to cut 260 jobs by the end of the year and further redundancies are expected in 2026. In a statement to The Journal , a Bank of Ireland spokesperson said: 'As we set out in February at our 2024 Annual Results, Bank of Ireland will become a leaner and more efficient organisation over the period ahead.' The spokesperson said the bank doesn't have a 'headcount target' but expects the 'headcount to reduce over the next two years'. By the end of this year, Bank of Ireland expects to reduce its workforce by 260 through a redundancy programme. Meanwhile, the spokesperson said that the bank will not replace some of those who may resign or retire. Advertisement Further job losses are expected next year and this is said to be part of a bid to keep running costs at €2 billion in both 2026 and 2027. 'But all the way along with this change, we will continue to invest in our people so that we can future-proof the company for a sustainable future,' said the spokesperson. An interim report for the first half of 2025 which was published today showed that Bank of Ireland's net profit fell to €608 million – down from €877 million the year previous. The report also found that costs were 3% higher than during the same period last year, 'with higher staff and other costs partly offset by efficiencies'. Staff costs, excluding pensions, stood at €450 million, €20 million higher than the first half of 2024. As of the end of June, the number staff employed by Bank of Ireland was 11,268, which is 215, or 2%, higher when compared to the 11,053 in the first half of 2024. Elsewhere, in its interim report Bank of Ireland described the first half of the year as a 'period of significant volatility following announcements from the US administration on proposed trading tariffs'. Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. Learn More Support The Journal
RTÉ News
a day ago
- Business
- RTÉ News
Bank of Ireland's half year pre-tax profits down 33% on last year
Bank of Ireland has today reported profits before tax of €721m for the six months to the end of June, a 33% drop on the profits of €1.08 billion the same time last year, due to falling ECB rates and a €137m impairement charge. But Bank of Ireland today reaffirmed its positive medium term outlook. Its shares dropped in early Dublin trade this morning. "The profit profile for the first half of the year is very much in line with expectations - it reflects a growing Irish book but also the rate environment as it reduces," said Bank of Ireland CEO Myles O'Grady, who was speaking on RTÉ's Morning Ireland. "Overall profits are strong and in line with expectations - supported by a robust overall interest income - but that narrative around a growing loan book, a growing wealth business, for all banks a lower [ECB] rate does have an impact." The bank also took a €137m impairement charge in the period, relating to "loan losses" and the "evolving macroeconomic outlook". Mr O'Grady said the bank's overall asset quality remained very healthy, but the charge was an attempt to head off growing risks in some parts of the business - particularly in the US. "When I look across our portfolios, our customers are in good shape too, they're navigating the environment well and we're there to work with them," he said. "I regard that as a pre-emptive measure to capture potential risk, the work we've done here is what you would expect given some of the news flows that's come out of the US in quarter two." The bank today announced an interim dividend per share of 25 cents and reaffirmed its guidance for a "progressive" dividend per share for the full year. The lender said its net interest income in the first half of the year came to €1.67 billion. This was down 8% from €1.80 billion the same time last year, but ahead of expectations, with positive momentum across lending and deposits. It said it now expect NII of about €3.3 billion for the full year - an upgrade on its previous guidance of €3.25 billion. The bank said a key financial metric, its Return on Tangible Equity (ROTE), came to 14.8% and it also reaffirmed its full year guidance for ROTE of about 15%. Total business income of €399m for the six month period was 4% higher on last year, while customer deposits came to €105.0 billion, €1.9 billion higher than in December. The bank also said it saw strong loan growth in Ireland of €1.3 billion, driven by Irish mortgages, where the group had a 40% share of the new lending market. It said it was retaining its guidance of about 2% loan book growth for the full year. Bank of Ireland said its asset quality remains "robust" with its non-performing loan ratio reaching 2.6% at the end of June, up 40bps since December 2024, but down 30bps from the same time last year and close to multi-year lows. Bank of Ireland finance chief Mark Spain told Reuters that the US trade deal on Sunday would not alter the bank's July 17 upgrade to its forecasts for Irish economic growth and that the removal of uncertainty may offer some upside. He added that its loan book showed there were no perceptible challenges emerging from the tariffs and that the caution larger business customers had shown at the height of trade tensions in April was beginning to dissipate. Analysts at Davy Stockbrokers said the bank's upgraded net interest income forecasts point to upside to 2026 and 2027 management and consensus expectations. Analysts expect pre-tax profits to fall by 18% for 2025 as a whole, based on an average of 12 polled by LSEG SmartEstimate. Last week Bank of Ireland apologised for an oil spill at its data centre in Cabinteely, which contaminated a nearby lake. This morning Mr O'Grady said the bank was working closely with the council, the Environmental Protection Agency and the local wildlife rescue charity to "see how best we can help".
