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How will Brexit affect Northern Ireland and the Republic of Ireland?

The International Monetary Fund (IMF) has said Ireland is one of the countries that would be hit by the economic effects of Brexit the hardest.

According to them, the loss in economic output for Ireland could be as much as for Britain itself.

A report by the Oireachtas Finance Committee also said lower exports would lead to lower spending by companies would hit employment and government revenues.

The analysis suggests employment levels could be 40,000 lower after ten years and the unemployment rate could be close to two percentage points higher.

In Northern Ireland, some report Brexit is expected to have a disproportionate impact on the economy which is reliant on exports to the EU.

Some economists have also warned of a drop-off in foreign direct investment.

will also end the €3.5bn in farm subsidies and structural grants received by Northern Ireland in the 2014-2020 period.

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Bank of Ireland is planning to sell up to €800m worth of non-performing loans this year as it moves to bring its balance sheet in line with European norms.

The bank had consistently ruled out any loan book sales – until CEO Francesca McDonagh switched her stance last July. At the time she said that the bank’s view on loan sales had to change “because the regulatory environment has changed” and stated that it was open to all options in relation to a reduction of bad debts.

Now, Bank of Ireland has earmarked between €600m and €800m worth of buy-to-let mortgages that will be either sold or put up for securitisation. The news was in the bank’s presentation to investors last month on its 2018 performance.

Bank of Ireland reduced its non-performing exposure (NPE) ratio to 6.3pc of its overall loan book last year, the lowest level of any of Irish bailed-out banks.

The bank’s level of NPEs dropped by 24pc last year to €5bn. It intends to reduce that ratio further to 5pc by the end of the year through a mix of sales, securitisation, and other methods.

A spokesman for the bank told the Sunday Independent that it expects to reduce its NPEs this year by between €1bn and €1.2bn. AIB is also in the process of an NPE sale.

Credit analyst at Davy Stephen Lyons said the impending loan sale was off the back of continued regulatory pressure from the European Central Bank (ECB).

“We saw this pressure last year where, as part of the ECB’s review of Bank of Ireland’s capital models, the bank was told to set aside more capital for its mortgage portfolio,” Lyons said.

“We are now seeing further regulatory pressure, whereby Bank of Ireland is being told to start increasing on an annual basis the money that it sets aside for bad loans, to a level beyond what the bank believes is required, which thereby encourages the bank to resolve these loans as soon as is possible.”

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