Tuesday, May 21, 2024

Bank of Ireland ups net interest income guidance

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Bank of Ireland said today it expects net interest income to come in slightly higher than previously expected this year on the back of market expectations for interest rates.

It had been guiding interest income to be 5-6% lower than 2023 but has revised that to a range of 3-4% lower today.

The European Central Bank is expected to start cutting interest rates from June.

In a trading update for the three months to the end of March, Bank of Ireland said its net interest income in the first quarter both performed in line with expectations and the previous quarter.

It said this reflected positive lending momentum, which was partially offset by lower deposit volumes and modestly higher deposit funding costs.

In today’s trading statement, Bank of Ireland said its customer loan balances rose to €80.7 billion at the end of March from €79.7 billion at the end of December.

Net lending at its Retail Ireland business rose by €0.2 billion on the back of continued growth in mortgage lending, while its market share of new lending was 40% of the first two months of 2024.

It noted that green mortgages accounted for 47% of new mortgage lending in the three month period.

Meanwhile, customer deposits for the quarter came to €98.4 billion, €1.8 billion lower than the end of 2023.

Bank of Ireland said its asset quality during the three month period performance in line with expectations and remains strong on theback of the “supportive Irish macroeconomic environment”.

“The group remains on track to continue delivering the financial targets contained in the 2023-2025 strategic cycle,” it stated,

Myles O’Grady, Bank of Ireland Group CEO, said the bank had a strong first quarter, underpinned by loan book growth, higher income and robust capital generation.

“The group is now in the second year of a three-year strategic cycle. We continue to make tangible progress with a focus on building stronger customer relationships, a simpler business, and a more sustainable company,” Myles O’Grady said.

He said the launch of a new green mortgage product was an important development for customers, while the bank also introduced new supports for customers impacted by fraud and continued to invest in technology and the branch network.

“The group also increased its funding commitment for housing development in Ireland and expanded agri-business green lending,” he said.

“We remain on track to deliver our committed financial targets, including the commencement of interim distributions this year. As we approach the mid-way point in our strategic cycle, we continue to generate value from our differentiated business model operating in attractive markets,” the CEO added.

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