Bank of Ireland has upgraded its net interest income (NII) guidance for the second time this year to more than €3.5 billion, after positive growth in lending, deposits and wealth assets. Chief executive Myles O’Grady said the further “positive commercial performance” had led the bank to raise the guidance.
In an interim management statement covering the nine months to the end of September, the lender said NII was 4 per cent higher year to date than in the same period of 2025, due to balance sheet growth and structural hedge benefits. The bank also reaffirmed its key guidance issued earlier in the year.
LOANS, DEPOSITS AND WEALTH
Total consumer loans rose by €3.6 billion to €86.1 billion over the nine months, the bank said. Irish loans rose about 8 per cent, led by mortgages and lending to small businesses, while deposits were up 3 per cent to €110.3 billion.
Operating costs increased 2 per cent. The statement said the bank expected loan book growth of about 5 per cent in 2026.
Total fee income rose by 6 per cent compared with the same period last year, and the bank expects growth of circa 4 per cent across the full year. Assets under management grew to €67 billion, up €1.5 billion in the third quarter.
SECOND UPGRADE THIS YEAR
In July, Bank of Ireland upgraded most of its financial targets for this year, with NII then forecast at about €3.5 billion. The bank has now upgraded that guidance to greater than €3.5 billion, O’Grady said.
The bank said that, based on positive indicators in the Irish economy, it recently raised its forecast for modified domestic demand growth in 2026 from 2.7 per cent to 3.9 per cent, while its forecast for next year has risen from 2.4 per cent to 2.8 per cent.
Consumer inflation is expected to average 3.5 per cent in 2026 and 3.2 per cent in 2027, with employment growth of 1 per cent expected this year and 2 per cent next year. House price inflation, forecast at 4 per cent this year, is expected to ease to 3.5 per cent next year, and the bank predicts housing completions of 39,600 and 42,000 respectively in each year.
RETURN TARGETS TO 2028
Statutory return on tangible equity is expected to be more than 14 per cent this year and is on track to rise above 16 per cent by 2028, the bank said.
“Three quarters into the first year of our new strategic cycle, we are delivering against all priorities and targets with real momentum,” O’Grady said. He said this was reflected in continued growth in loans, deposits and wealth assets under management, supporting income growth and strong capital generation, while asset quality remains resilient.
O’Grady added that the company would remain alert to geopolitical developments, but said a favourable Irish economy and the bank’s position in the market had made him confident it was on track to deliver its financial targets out to 2028, including growth in return on tangible equity to more than 16 per cent.