This triggered its first interim dividends since before the banking crisis, as it plans to pay out €352m, or 35c per share. It has only made annual dividend payments over the last six years.
Net interest income – the balance between what it pays savers in interest and what it gets from borrowers – grew by 2pc year-on-year to €1.8bn. It expects this to be €3.55bn in the full year, at the higher end of earlier guidance.
‘We’re meeting or beating our targets and investing for the future’
After tax, Bank of Ireland booked profits of €877m in the six months, up from €853m in the same period last year.
The bank’s loan book increased by €1.8bn, up 2pc, which included €1bn in Irish mortgages and €300m in loans to businesses.
The loan book is expected to remain flat in the second half of this year, with the bank’s retreat from the UK personal loans market offsetting Irish growth.
Asset quality keeps increasing, with stage 1 loans now accounting for 84pc of the total book.
The bank reduced the proportion of non-performing exposures in its loan book to 2.9pc, and increased sustainable finance lending to €12.5bn, up 24pc year-on-year.
Customer deposits were up €0.6bn to €100.8bn, with savers moving €1.3bn into higher interest rate accounts, which can attract annual returns of up to 3pc. This was consistent with prior reporting periods, which shows no great rush by savers to take their money out of low-interest current accounts.
Bank of Ireland said its operating expenses, expected to be up 5pc-6pc on last year, reflected inflation, business growth and additional investment to “future-proof our business, partially offset by efficiencies”.
It now expect levies and regulatory charges to be between €125m and €130m this year, having previously guided €160m to €165m, based on reduced deposit guarantee scheme contributions.
The net credit impairment charge of €50m it took was said to be “materially better than expectations”.
The group’s liquid assets of €44.4bn have increased by €0.8bn since the end of December 2023.
Davy said the results show strong business momentum from net lending growth, particularly in Ireland, and higher fee income and wealth assets under management.
‘We are very well positioned to continue to deliver attractive returns for our shareholders’
“Total income of €2.2bn was broadly in line with Davy and consensus, with net interest income 2pc and 1pc below Davy and consensus respectively, offset by higher fee income,” it said.
Myles O’Grady, the Bank of Ireland chief executive, said: “The group had an excellent performance in the first half of 2024, reporting a profit of €1.1bn, up 5pc. This performance – underpinned by growth in our loan book and wealth assets, higher income and robust capital generation – supports upgraded earnings guidance for the year.
“We are now half-way through our three-year strategy. We’re meeting or beating our targets and investing for the future.”
Mr O’Grady added that the bank’s differentiated business model operates in structurally attractive and growing markets and is highly capital generative.
“These factors, complemented by our single-minded focus on delivery, make us very well positioned to continue to deliver attractive returns for our shareholders through the current strategic cycle and beyond.”
PTSB and AIB, Bank of Ireland’s main rivals in retail banking, are also due to report results this week.