However, the bank highlighted growth in more specialised mortgage lending with its bespoke operation completing £600m since launching in 2019.
“Bank of Ireland UK has today reported strong growth in niche mortgage lending for 2020, as the bank successfully pivots towards mortgage segments where its mortgage propositions and expertise are adding most value to mortgage intermediaries,” it said.
It added that the £3.1bn lending generated improved returns while maintaining lending quality and was ahead of initial expectations when entering Covid-19 lockdown.
And during the year more than 23,000 mortgage payment breaks were implemented to help customers affected by the Covid-19 pandemic.
Bank of Ireland also said its online mortgage application process had taken four days from the typical process.
“Supporting our customers to buy their own homes, including new tailored mortgage products for professionals, was one of our growth segments,” it said.
“The mortgage business operates in a highly competitive market and we are developing customer value propositions which place less focus on the mainstream re-mortgage market.”
Discussing the market overall, the lender said there was little evidence to date of a material increase in mortgage stress but noted it may be some time before the underlying picture in the housing market was evident.
Profits down, impairments up
Overall, Bank of Ireland UK achieved an underlying profit before tax of £50m, down from £166m in 2019, while its net interest margin dipped to 1.84 per cent from 1.94 per cent.
The bank also increased its loss provision to £151m from £40m but added that approximately 70 per cent of the impairment charge covered assets that are not credit impaired at present.
In total, 2.48 per cent of all loans were credit impaired, compared to 1.31 per cent in 2019.
It promised a further simplification of its mortgage product offering, while the group will relocate its head office from London to Belfast.
George Higginson, UK mortgages director at Bank of Ireland UK, said 2020 was an extraordinary year for the bank, customers, intermediaries and colleagues.
“I want to thank my colleagues whose agility and commitment enabled us to be there continuously for our customers and intermediaries throughout the last year,” he said.
“There have been challenges across the mortgage market and like other lenders, we provided over 23,000 mortgage payment breaks to support customers through the Covid-19 pandemic.
“I am proud that Bank of Ireland continued to offer a full range of mortgages throughout the year providing intermediaries with certainty and continued service delivery.”
He noted that in light of the vaccine rollout, improving economic conditions and extension of government support schemes, the lender expected a busy year of mortgage activity in 2021.
“For Bank of Ireland, we continue to have great success with our Bespoke proposition. The positive feedback from the broker market has been very encouraging and confirms there is a need for a lender to take an individual underwriting approach,” Higginson concluded.