BANK OF IRELAND HIT BY 81 PER CENT PROFITS SLUMP

The lender — responsible for the banking, insurance and foreign exchange services offered by the UK Post Office — has been badly hit by the collapse of the Irish property market and the severe recession there.

The bank’s chairman, Richard Burrows, is fighting for his job. According to KBW analyst Mark Phin, Bank of Ireland is likely to report credit impairments of €1.4 billion when it presents its results for the 12 months to March 31 on Tuesday.

However, Phin warns that given the experience of Allied Irish Bank (AIB), which last week reported a surge in bad debts and loan impairments due to the deteriorating state of the Irish economy, Bank of Ireland’s bad debts could come in even higher than expected.

Bank of Ireland is also expected to provide an update on negotiations with the Irish government over how much it will pay to participate in a bank bailout scheme.

The Irish government has set up the National Asset Management Agency to take on E90 billion of bad loans that AIB and Bank of Ireland gave beforethe recession.

Last week, the Irish finance minister endorsed the bank’s turnaround plan.