Bank of Ireland will pay its first interim dividend since before the financial crisis more than a decade ago, with the lender reiterating its full-year income forecasts in its latest trading update published on Wednesday morning.
That is despite recent back-to-back falls in interest rates by the European Central Bank, which resulted in the lender’s net interest income being 3% lower in the nine months to the end of September and 1% lower on a like-for-like basis. However, Bank of Ireland said the fall was in line with market expectations.
It added that it was on track to achieve a net interest income of €3.55bn, helped by “supportive Irish macroeconomic conditions,” including continued robust fiscal and labour market conditions combined with growth in customer activity and house prices.
The lender also confirmed that it will pay an interim dividend of 35 cent to shareholders next week.
Bank of Ireland’s loan book increased by 4% in the year to €82.5bn at the end of September, with its retail Ireland net lending rising by €1.4bn on the back of continued growth in mortgage lending. The bank said its market share of new lending was 41% for the first nine months of the year.
Corporate and Commercial net lending increased by €400m, primarily reflecting growth in business banking and corporate lending in Ireland of €500m, the bank added.
“The successful execution of the Group’s strategy continues to deliver very strong levels of business performance, profitability, and capital generation,” said chief executive of Bank of Ireland, Myles O’Grady.
“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.”
Mr O’Grady added that the bank had recently completed a €520m share buyback programme, with the interim ordinary dividend of 35 cents to be paid on November 7.
“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,” Mr O’Grady concluded.