Bank of Ireland has upgraded its earning guidance for the full financial year after reporting a 5% profit increase during the first half.
The bank made €1.1bn in profit before tax during the opening six months of 2024, and credited its growing loan book and wealth assets, higher income and robust capital generation.
Net lending increased €1.8bn, driven by growth of €1bn in Irish non-property loans, and net interest income increased 2% on a like-for-like basis, in line with previous guidance, reflecting increased lending as well as higher interest rates and higher funding costs.
The bank expects to make c. €3.55bn in net interest income for the full year, which would be at the higher end of guidance issued Q1. Group deposits, meanwhile, increased by €600m to €100.8bn.
Business income, including shares of associates and joint ventures, and operating expenses both rose 6%, again in line with guidance. Growth in wealth and insurance and lower retail UK commissions were credited for improving business income.
Operating expenses are projected to increase 5-6% year-on-year due to inflation as well as investments in strategic growth and consolidation.
Bank of Ireland now expects levies and charges for the year to come to €125-130m, down from €160-165m previously, and the net credit impairment charge of €50m taken by the bank was “materially better than expectations”.
The company also lowered the proportion of non-performing exposures across its loan book to 2.9% while increasing sustainable finance lending 24% versus H1 2023 to €12.5bn.
The group’s liquid assets have increased by €800m to €44.4bn since December, while wholesale funding rose €400m to €12.2bn.
The group had an excellent performance in the first half of 2024, reporting a profit of €1.1bn, up 5%. 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,” said Myles O’Grady, CEO of Bank of Ireland.
“We are now half-way through our three-year strategy. We’re meeting or beating our targets and investing for the future. This year we’ve announced a range of improvements to our branches, ATMs, contact centre services and fraud support for our customers.
“The launch of innovative green mortgages and the expansion of agri-business green lending, and an increased funding commitment for housing development were important developments in H1.”
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