Trading conditions in the year to date remain challenging, particularly in Ireland. Conditions have improved in Great Britain and our Capital Markets and Polish businesses are performing well. In the US, M&T reported strong results in the first quarter of 2010.
OPERATING PROFIT Please note that all trends in this update are in constant currency terms.
A combination of factors is placing downward pressure on our net interest margin and / or operating profit before provisions this year. These factors include: • Highly competitive and uneconomic market repricing of customer deposits • The elevated cost of wholesale funding and the higher cost of the Government Guarantee • Reduced income on capital and increased interest payments on higher yielding bonds following the two capital exchanges successfully completed in the past year • NAMA administration costs and reduced income from NAMA loans • Targeted loan volume reductions outside Ireland to reduce our loan to deposit ratio
Positive factors, including loan repricing across all portfolios and a reduced impact or non recurrence of some of the above factors, are expected to have a …