Bank of Ireland said today that its full year guidance remains unchanged despite modestly lower interest rate expectations.
In a trading update, Bank of Ireland said its net lending for the third quarter was €2.8 billion higher compared to the end of December, supported by €2.1 billion growth in Ireland.
It said its liquidity profile remains strong, supported by its retail franchise in Ireland.
Customer deposits stood at €100.7 billion at the end of September, flat compared to the end of June and €0.5 billion higher than the end of 2023.
The bank said the increase in 2024 reflects growth in Retail Ireland and Retail UK, which was partially offset by lower Corporate and Commercial volumes.
Bank of Ireland said its asset quality further improved in the third quarter and remains strong, helped by the supportive Irish situation. Its non-performing loan ratio was 2.7% of gross customer loans at September, down from 2.9% at the end of June and 3.1% at the end of December 2023.
The lender said its net interest income was 3% lower in the nine months to the end of September and 1% lower on a like-for-like basis, with the performance in line with its expectations.
"This performance reflects the evolving interest rate environment, growth in lending income particularly in Ireland, higher funding costs and continued commercial pricing discipline. Net interest income guidance for FY24 of about €3.55 billion is unchanged notwithstanding modestly lower interest rate expectations," it stated.
Bank of Ireland said its business income, including share of associates and joint ventures, is performing in-line with its expectations.
Positive momentum in its Wealth and Insurance businesses, which accounts for close to 50% of total group business income, is the key driver of this, with Davy in particular performing strongly, it added.
Breaking down its divisions, Bank of Ireland said net lending at its Retail Ireland division increased by €1.4 billion, supported by continued growth in mortgage lending.
Its market share of new lending was 41% for the first nine months of the year and it said it continues to support the transition to a more sustainable economy with A and B rated BER properties accounting for about 50% of new mortgage lending in the first nine months of 2024.
Meanwhile, Corporate and Commercial net lending increased by €0.4 billion mainly on the back of growth in business banking and corporate lending in Ireland of €0.5 billion.
Bank of Ireland said that net lending at its Retail UK division was €0.1 billion higher, mainly reflecting growth in mortgage lending largely, which was offset by a €0.4 billion reduction in its UK Personal Loans portfolio which the group had previously guided it was exiting.
In October, it agreed the sale of its performing UK Personal Loans portfolio of about €0.8 billion.
Bank of Ireland also said that it notes the recent Court of Appeal ruling in respect of historic motor finance lending undertaken by certain lenders in the UK and the intention of those lenders to appeal the decisions to the Supreme Court. The group will continue to closely monitor developments.
Bank of Ireland's UK motor finance business has about a 2% market share of new lending, with a loan book of about €3 billion at the end of the third quarter.
"The successful execution of the group's strategy continues to deliver very strong levels of business performance, profitability, and capital generation," Myles O'Grady, Bank of Ireland's Group CEO, said today.
"The loan book increased by 4% while Wealth Assets Under Management grew by 15%. We continue to invest for our customers, including simpler ways of banking and enhanced fraud prevention and detection," the CEO said.
"As we approach the end of the second year of our three-year strategic cycle, our highly capital generative and differentiated business model, operating in structurally attractive and growing markets, positions us well to continue to support our customers, invest in our business and deliver attractive returns for our shareholders," he added.
He also said that Bank of Ireland recently completed a €520m share buyback programme and the interim ordinary dividend of 35 cents per share will be paid in November.
Bank of Ireland shares were lower in Dublin trade today.
