February 26, 2018 / 8:13 AM / 22 days ago

Bank of Ireland pays first dividend in a decade

* To pay out 11.5 euro cents per share

* Tier 1 capital ratio 13.8 pct at end-Dec vs 12.8 pct end-Sept

* Expects net loan book growth in 2018

DUBLIN, Feb 26 (Reuters) - Bank of Ireland is resuming dividend payments for the first time since the financial crisis, it announced on Monday, as it reported a rise in its capital and annual underlying profits steady at 1.1 billion euros.

The bank a year ago said it expected to pay its first dividend in a decade in the first half of 2018, a year later than initially hoped as it awaited further clarity on Brexit and visibility on its pension deficit.

The deficit stabilised at 500 million euros last year and new chief executive Francesca McDonagh said the bank, the Irish lender most exposed to the British property market, was seeing no material impact so far from Brexit.

“This is a pivotal moment,” McDonagh, who took over in October, told Reuters, referring to the re-commencement of dividend payments at 11.5 euro cents per share.

That equates to 18 percent of sustainable earnings, Davy Stockbrokers said, calling it somewhat lower than expected.

The bank reiterated its aim to progressively build payments towards a payout ratio of around 50 percent of sustainable earnings.

Ireland’s largest bank by assets, which led a return to profitability across the Irish banking sector, boosted its core Tier 1 capital to 13.8 percent from 12.8 percent as of the end of September under fully loaded Basel III industry rules.

It said it expected net loan book growth in 2018 and a net interest margin, a measure of the profitability of its lending, broadly in line with the 2.24 percent rate at the end of 2017.

Reporting by Padraic Halpin; editing by Jason Neely

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