Bank of Ireland has today reported profits before tax of €721m for the six months to the end of June, a 33% drop on the profits of €1.08 billion the same time last year, due to falling ECB rates and a €137m impairement charge.
But Bank of Ireland today reaffirmed its positive medium term outlook.
Its shares ended lower in Dublin trade today.
"The profit profile for the first half of the year is very much in line with expectations - it reflects a growing Irish book but also the rate environment as it reduces," said Bank of Ireland CEO Myles O'Grady, who was speaking on RTÉ's Morning Ireland.
"Overall profits are strong and in line with expectations - supported by a robust overall interest income - but that narrative around a growing loan book, a growing wealth business, for all banks a lower [ECB] rate does have an impact."
Bank of Ireland today said it was setting aside more money than expected to cover potential losses in its US acquisition finance business in the first half of the year.
The bank set aside €137m, reflecting a cost of risk of 33 basis points and increased its expectation for the year as a whole to 30 basis points from the low to mid-20s previously forecast.
It said just under a third of the first half charge reflected its view of the macroeconomic outlook, with most of the rest related to its €1.5 billion US finance business, equivalent to just under 2% of its total loan book.
Mr O'Grady said the bank's overall asset quality remained very healthy, but the charge was an attempt to head off growing risks in some parts of the business - particularly in the US.
"When I look across our portfolios, our customers are in good shape too, they're navigating the environment well and we're there to work with them," he said. "I regard that as a pre-emptive measure to capture potential risk, the work we've done here is what you would expect given some of the news flows that's come out of the US in quarter two."
The bank today announced an interim dividend per share of 25 cents and reaffirmed its guidance for a "progressive" dividend per share for the full year.
The lender said its net interest income in the first half of the year came to €1.67 billion. This was down 8% from €1.80 billion the same time last year, but ahead of expectations, with positive momentum across lending and deposits.
It said it now expect NII of about €3.3 billion for the full year - an upgrade on its previous guidance of €3.25 billion.
The bank said a key financial metric, its Return on Tangible Equity (ROTE), came to 14.8% and it also reaffirmed its full year guidance for ROTE of about 15%.
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Total business income of €399m for the six month period was 4% higher on last year, while customer deposits came to €105.0 billion, €1.9 billion higher than in December.
The bank also said it saw strong loan growth in Ireland of €1.3 billion, driven by Irish mortgages, where the group had a 40% share of the new lending market.
It said it was retaining its guidance of about 2% loan book growth for the full year.
Bank of Ireland said its asset quality remains "robust" with its non-performing loan ratio reaching 2.6% at the end of June, up 40bps since December 2024, but down 30bps from the same time last year and close to multi-year lows.
Bank of Ireland finance chief Mark Spain told Reuters that the US trade deal on Sunday would not alter the bank's July 17 upgrade to its forecasts for Irish economic growth and that the removal of uncertainty may offer some upside.
He added that its loan book showed there were no perceptible challenges emerging from the tariffs and that the caution larger business customers had shown at the height of trade tensions in April was beginning to dissipate.
Analysts at Davy Stockbrokers said the bank's upgraded net interest income forecasts point to upside to 2026 and 2027 management and consensus expectations.
Analysts expect pre-tax profits to fall by 18% for 2025 as a whole, based on an average of 12 polled by LSEG SmartEstimate.
Last week Bank of Ireland apologised for an oil spill at its data centre in Cabinteely, which contaminated a nearby lake.
This morning Mr O'Grady said the bank was working closely with the council, the Environmental Protection Agency and the local wildlife rescue charity to "see how best we can help".
