Bank of Ireland Group has revised its net interest income guidance for 2023, citing higher rates and strong business momentum. The Irish lender anticipates that its net interest income for the second half of the year will be approximately 5% higher than the first half, which amounted to 1.80 billion euros ($1.90 billion). The company also reaffirmed its business income guidance for the year and expects the second half to be in line with the first half's earnings of EUR361 million.
Positive Business Performance
Bank of Ireland Group reported an 11% year-on-year growth in business income for the nine months ending September. This growth was primarily driven by increased fee income from higher customer activity and the acquisition of Davy. Additionally, the company recorded EUR19 million in other income, attributable to market movements in the third quarter.
Strong Lending and Deposit Growth
The group witnessed a significant increase in Irish net lending, with a growth of EUR1.3 billion fueled by robust mortgage lending. Overall, the company's loan book has expanded by EUR8.7 billion since December, reaching a total of EUR80.7 billion. Moreover, Bank of Ireland Group experienced EUR1.3 billion in deposit growth during the nine-month period.
Solid Balance-Sheet Strength
Bank of Ireland Group's fully loaded common equity Tier 1 ratio, a crucial measure of balance-sheet strength, stood at 15.2% at the end of the reporting period. This demonstrates an improvement from the previous quarter's ratio of 14.8%.
Stable Cost Guidance and Anticipated Bank Levy
The bank has maintained its cost guidance for 2023 at EUR1.85 billion in operating expenses for the year. Furthermore, Bank of Ireland provisionally estimates that the Irish bank levy in 2024 will amount to approximately EUR90 million, a significant increase compared to the EUR25 million projected for 2023.
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