Page last updated at 09:14 GMT, Tuesday, 19 May 2009 10:14 UK

Irish bank head quits over losses

The Bank of Ireland
The bank made a pre-tax loss of 7 million euro

Bank of Ireland has reported a pre-tax loss of 7m euros prompting its chairman to resign.

The bank said the loss in the year to March, compared with a pre-tax profit of 1.9bn euros the previous year.

Nevertheless, the earning figures for Ireland's second largest bank were better than investors feared given the intense economic crisis.

The bank's shares rose by 25% in early trading amid broadly positive sentiment on the Irish Stock Exchange.

Chairman Richard Burrows has apologised and said he would step down in July.

"Accountability for these losses must be taken at the top and, accordingly, I have informed my fellow directors of my personal decision to stand down," Mr Burrows said.

"On my own behalf, and on behalf of my fellow directors, I apologise to our stockholders for the loss in value of their stock and for the cancellation of dividends."

Analysts said they had expected worse than the 7m euros loss and compared the bank's debt and cash position favourably with its rival, Allied Irish Bank.

Ireland's banking sector has been badly hit by the international financial turmoil, the collapse of a domestic property bubble and a deepening recession in the former "Celtic Tiger" economy.

In a rescue plan for its economy, the Irish government has pumped seven billion euros into its top two lenders, with Allied Irish Bank and Bank of Ireland, each getting 3.5bn euros in state cash.

BofI chief executive Richie Boucher said on Tuesday that it had been an "extremely difficult" year.

He said that excluding non-core items, underlying profit before tax was 332m euros and underlying earnings per share was 30.2 cents "representing a decline of 81% and 80% respectively over the prior year."

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