DUBLIN (Reuters), – Bank of Ireland reported Monday that its annual profits were the highest since the financial crisis in global finance a decade ago. The bank stated it intends to pay shareholders 104m euros ($116 million) through buybacks and dividends.

Ireland’s largest lender, by assets, saw an underlying full year pretax profit rise to 1.37 billion Euros from a loss of 374 million euros in 2020. It had also set aside 1.1billion euro to pay for loan defaults caused by COVID-19 disruption.

The bank repaid 194million euros from those provisions. It almost doubled its profit margins in 2019 when it accounted for 758 million euro of the 2017 pandemic. Its highest previous profit, prior to the Irish banking crises in 2015 was 1.2 million euros.

Myles O’Grady, Finance Chief, told Reuters that a 12% increase in income and a 4% decrease in costs were strong endorsements of the strategy to reduce costs to 1.5 billion euro by next year and achieve a sustainable return of tangible equity (ROTE), above 10%.

According to the bank, the ROTE stood at 12.8% in 2013. This was a result of a solid business performance as well as impairment writebacks.

O’Grady stated that he expected the European Central Bank to raise interest rates in 2022. Bank of Ireland has updated their estimate to show that an increase of 100 basis points would raise annual net interest income by 274 millions euros.

Bank said that the outlook for 2022 was positive. The total income is expected to match 2021’s and impairment charges are to remain below normalised levels. However, costs continue to drop and distributions keep increasing.

Bank of Ireland has also been in discussions to purchase most of KBC’s Irish assets. This is as the Belgian-owned group exits the Irish market. O’Grady stated that there were no signs yet that the competition authorities would approve of the deal.

($1 = 0.8952 euros)