Bank of Ireland Group Plc shares rose the most in almost two months, as the lender’s CEO suggested the economy is proving more resilient than expected in face of coronavirus.
The company’s shares rose as much as 11% in Dublin to 2.04 euros, the highest level since June 8, giving Ireland’s biggest lender a market value of 2.2 billion euros. The shares traded at 1.95 euros as of 9:55 am.
In an interview with Bloomberg Television, CEO Francesca McDonagh said she’s feeling marginally more optimistic about the prospects for economic recovery than in May. The bank now expects 2020 new lending volumes to be about 70% of 2019’s level. In May, it said lending volumes could be between 50% to 70% of last year’s figure.
The bank took a charge of almost $1.2 billion for the first half of 2020 to help deal with the consequences of the virus. The lender is set to cut its headcount to below 9,000 from 10,400 in the medium term, it said
on Wednesday, with McDonagh telling analysts the bank has started a new voluntary redundancy program.
The bank will run down lower margin and less profitable parts of its Great Britain business, resulting in a smaller mortgage book, while it will start a strategic review of its Northern Ireland business, McDonagh said. The firm will give a wider update on its plan to reduce costs with its full year 2020 earnings.
“Impairments are much higher but appear front-loaded,” Stephen Lyons and Diarmaid Sheridan, analysts at Dublin-based securities firm Davy, said in a research note.“Capital is much better than anticipated while also being achieved with a conservative approach to provisioning. The income outlook for 2020 is better than indicated at Q1.”