Bank of Ireland plans to increase the size of its loan book and invest in front-end technology to improve profitability and efficiency, CEO Francesca McDonagh said today ahead of the bank's investor day.
Bank of Ireland said it expects to increase its lending by around 20% over three years with 65% of that growth in Ireland and 35% internationally.
The bank is targeting a return on tangible equity of above 10% by 2021 compared to 6.9% in 2017.
To support the growth and drive a reduction in costs the bank is planning to invest €250m in its IT systems, which is in addition to €900m of investment in banking systems previously announced.
Bank of Ireland also said it will invest €250m in changes to its business model.
As a result, the bank expects to reduce its cost base by €200m in 2021, and achieve a cost income ratio of around 50% in 2021, compared to around 65% in 2017.
The lender also announced expansion plans for the UK market, where it is looking to increase returns through investing in and repositioning its business interests.
Bank of Ireland also said it is trading in line with expectations and the guidance provided at the group's 2017 full-year results in February.
It also said that dividends will increase "on a prudent and progressive basis" and, over time, it aims to build towards a payout ratio of around 50% of sustainable earnings.
Bank of Ireland's group CEO Francesca McDonagh said the bank's strategic ambition is clear - "to be the National Champion Bank in Ireland, with UK and selective international diversification".
Ms McDonagh said that after a period of restructuring, the bank is in a strong financial position and is in a growth phase.