The Bank of Ireland said on Monday it tripled interest rate investments last year – and expects to rise in 2021.
Reporting on its full-year results, the Bank of Ireland said the volume of consumer investments with negative interest rates was € 8.5 billion ($ 10.2 billion) at the end of December, up from € 2.7 billion in 2019. Not surprisingly, that’s good business for the bank. Its financing costs were reduced by € 31 million last year from paying customers to invest.
The bank imposes negative interest rates on businesses, as well as customers and high-value credit unions. According to the Irish Times, the current threshold for which customers must pay for the benefit is to put money in the bank € 2.5 million, which the bank could reduce to € 1 million.
On a conference call with analysts, Chief Financial Officer Myles O’Grady said the bank expects investments with a negative interest rate to expand to nearly € 15 billion this year, which will benefit the bank nearly € 80 million.
Overall, the bank said it lost € 760 million last year due to € 1.1 billion in deficits. Net income fell 2%. Its adjusted loss per share of 57 cents beat analysts’ estimates by 2 cents, according to FactSet
Bank of Ireland shares rose 3% in Dublin trading and have gained 6% over the last 52 weeks.