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DUBLIN, Feb 24 (Reuters) - Bank of Ireland expects to pay its first dividend in a decade in the first half of 2018, a year later than initially hoped as it awaits further clarity on Britain's vote to leave the European Union, it said on Friday.
Ireland's largest bank by assets outlined provisional plans to reinstate dividends alongside its full-year results for 2016 a year ago but warned in July that external factors, including Brexit, could force a delay.
The bank also said on Friday it wanted to see recent bond market-led improvements in its pension deficit sustained. Its initial plan would have made it the first domestic Irish lender to resume dividend payments since the financial crash.
"From a Brexit point of view, we haven't seen any material negative impacts, other that the translation impact on our profits from our UK business," Bank of Ireland Chief Executive Richie Boucher told Reuters in a telephone interview, describing the dividend decision as a finely balanced call.
"The pension deficit did stabilise. We don't expect the same volatility in bond yields as we had in the first half of last year but we do want to make sure that continues to be the case. It's probably just a bit of a caution on the bond yield issue."
The bank, which was freed up to pay dividends again last year under the terms of its state bailout, reiterated that it would start at a modest level before moving steadily towards a payout ratio of about 50 percent of sustainable earnings.
The bank reported an underlying full-year pretax profit of 1.07 billion euro ($1.1 billion) versus 1.2 billion euros a year ago. ($1 = 0.9447 euros) (Reporting by Padraic Halpin; editing by David Clarke)