Bank of Ireland said that it “does not currently expect any material change” to the £374 million (€433.6 million) the provision it has made for the UK motor finance commissions scandal after UK regulators outlined a redress scheme in late March.
That is even though the UK Financial Conduct Authority (FCA) reduced its estimated cost for lenders by almost £2 billion compared to an initial estimate of £11 billion when it outlined an initial proposal last October.
“The group notes the FCA’s final details on the UK motor finance redress scheme. The group does not currently expect any material change to its cumulative UK motor finance provision of £374 million,” Bank of Ireland said in a trading update published on Friday.
The scheme has been challenged this week by a number of parties, including Mercedes-Benz, Volkswagen and consumer group Consumer Voice, prompting the FCA to say that these will serve to delay customers receiving compensation.
Bank of Ireland said it started this year “with momentum” despite geopolitical uncertainty posed by the Middle East conflict.
It said that its loan book grew at an annual rate of 5 per cent to €83.6 billion, while deposits rose by €4 billion to €107.2 billion, and net asset under management inflows into New Ireland and Davy amounted to €1.1 billion.
“Asset quality is strong across our portfolios and we remain vigilant to the evolving geopolitical environment,” said chief executive Myles O’Grady.
The bank maintained its full-year forecasts for net interest income to edge up to €3.4 billion from €3.37 billion in 2025, fee income to advance about 4 per cent, and total costs to come to €2.2 billion.