Ireland’s banks were facing headwinds, even before Covid-19 disruption.
Three out of four of Ireland’s largest consumer-facing banking institutions reported year-on-year declines in pre-tax profits in their 2019 results. For the largest two, Bank of Ireland and Allied Irish Bank, profits have been in decline for several years.
Allied Irish Banks has seen its return on equity ratio (RoE) decline from 11.36% in 2015 to 2.56% in 2019. At Bank of Ireland, RoE has fallen from 10.39% in 2015 to 4.29% in 2019.
Negative interest rates at the European Central Bank have weighed down on profitability in recent years.
The exception is Permanent TSB, which saw its pre-tax profits increase from $3.45m in 2019 to $47.19m in 2019. The bank attributes the improvement to shrinking its non-performing loans and lending growth.
