REG - Bank of Ireland Grp - Bank of Ireland Interim Results 29 July 2025

Bank of IrelandAnnouncement

Tue 07:00

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RNS Number : 9632S  Bank of Ireland Group PLC  29 July 2025

Bank of Ireland Group plc (the "Group")

 Interim Results for the 6 months to 30 June 2025

 

29 July 2025

 

Bank of Ireland has today published its H125 results, reporting PBT of €721m
and ROTE of 14.8%. This reflects strong strategic execution, with AUM growing
3%(1) and Irish loans and deposits growing 5%(1), supporting an upgraded
outlook for net interest income in FY25 and beyond.

 

The Group announces an interim dividend per share of 25 cents (40% payout) and
reaffirms its guidance for a progressive dividend per share for the full year.

 

The Group reaffirms its FY25 guidance for ROTE of c.15% and organic capital
generation of 250-270bps.

 

The Group also reaffirms its positive medium term outlook, with ROTE building
to >17% by FY27.

 

Comment: Myles O'Grady, Bank of Ireland Group CEO:

 

"The Group had a good H1 performance, with a profit before tax of €0.7
billion and is on track to deliver its full year targets. We are mid-way
through the final year of our strategy and delivering with momentum. This is
underpinned by our strategic execution, differentiated business model and the
attractive markets we operate in. Product and digital innovations are
strengthening our customer outcomes. Against an uncertain international
backdrop, the Irish economy is resilient. Bank of Ireland is well positioned
to navigate this environment, generating strong levels of capital to support
customers, grow our balance sheet, invest in the business and deliver
attractive shareholder returns."

 

Key highlights:

 ·         Adjusted RoTE of 14.8%; statutory RoTE of 11.3%; reaffirm FY25 guidance for
           adjusted ROTE of c.15%
 ·         Strong capital position with pro forma fully loaded CET1 ratio 16.0%
 ·         Organic capital generation of 110bps in H1 and 250-270bps guidance reaffirmed
           for FY25
 ·         Interim ordinary dividend of 25 cent per share or €243m (40% payout, in line
           with H124)
 ·         Strong Irish balance sheet growth with loans and deposits +5%1; excellent
           Irish mortgage performance
 ·         Net interest income €1.67bn in H1; upgraded FY25 NII guidance to c.€3.3bn
 ·         Business income(2) +4% yoy driven by strong Wealth and Insurance performance
           +8%, with net inflows at 4% annualised of opening AUM
 ·         Operating expenses +3% yoy, in line with guidance; cost to income ratio of 48%
 ·         Asset quality remains strong with NPE ratio of 2.6%, close to multi year lows
 ·         Impairment charge of €137m (33bps1) reflects net portfolio activity of
           €97m and additional management adjustments of €40m; FY25 guidance now
           c.30bps, reflecting H1 performance
 ·         24% yoy increase in Sustainable Finance lending to €15.5bn, meeting end-2025
           target of €15bn early

 

Irish macro backdrop

The Irish economy is resilient and growing against a more uncertain external
backdrop, particularly in relation to international trade arrangements. The
Group's Economic Research Unit forecasts headline GDP growth of 8.1% in 2025
and 3.2% in 2026 and these forecasts incorporate consideration of the current
evolving policy framework.

 

In addition, it is worth highlighting that a combination of above-average
economic growth and prudent management of the public finances over many years
have positioned Ireland with one of the lowest debt-to-GDP ratios in the
European Union. Irish consumers and businesses are also in good balance sheet
shape. Supported by robust savings activity over many years, household net
worth is at an all-time high.

 

Key stakeholder outcomes in H1

The Group continues to strengthen its relationships with customers, colleagues
and society which supports the generation of attractive returns and capital
distributions for shareholders.

 

For Customers, our strategy is delivering better outcomes with product
innovation, technology, and digital deployments making it easier to bank with
Bank of Ireland. This is evidenced in an improved Personal Relationship Net
Promoter Score, a key measure of customer satisfaction, which increased by 9
points yoy to +30, a new high. In addition, the Group's Customer Effort Score
improved to a record high of +61, +4 points yoy while at the same time,
complaints fell by 22% yoy.

 

For Colleagues, our focus on Bank of Ireland as a leading place to work -
which is integral to the attraction and retention of talent - has seen the
Group ranked seventh in Ireland's Top 200 Employers (2025), up from 133 in
2021.

 

For Society, housing is one of the most pressing issues facing Ireland today.
In Q2, the Group raised its ambition to support the delivery of up to 30,000
homes, up from c.25,000. The Group also achieved its end-2025 €15bn
sustainable finance target at end Q1, and remains well placed to deliver on
our ambition of growing this lending to €30bn by the end of 2030.

 

For Shareholders, the Group recommenced interim ordinary dividends in 2024,
with an interim dividend of €243m announced today for H125. Since the start
of 2023 the Group has returned €2.6bn to shareholders through a series of
buybacks and dividends, equating to c.22% of the 30 June 2025 market
capitalisation, reducing the Group's share count by 11%.

 

H1 Financial performance

Income

Net interest income in H1 2025 was €1.67bn (H124 €1.80bn), ahead of our
expectations, with positive momentum across lending and deposits and the
benefits of the Group's structural hedge programme offset by lower rates. For
FY25, we now expect NII of c.€3.3bn, an upgrade on prior guidance of
>€3.25bn. The Group has increased its bond portfolio in H1 to c.€15bn
(Dec 24: c.€9bn), further supporting its positive NII outlook into FY26 and
FY27.

 

Total business income(2) of €399m was 4% higher yoy.  Across our Wealth
& Insurance business, fee income increased by 8% and AUM increased to a
record high of €55.6bn, with net inflows of €1.2bn equivalent to 4% of
opening AUM(1), a strong outturn against the wider market volatility. For
FY25, the Group maintains its guidance for total business income(2) to grow by
c.5%.

 

Operating expenses

The Group continues to maintain tight control over its cost base. Operating
expenses have progressed in-line with expectations (+3% yoy), primarily
reflecting higher staff costs. The underlying cost to income ratio was 48% in
the period. The Group maintains its FY25 guidance for operating expenses to
rise by c.3%.

 

Non-core costs were €83m in H1. The Group is now anticipating a broadly
similar outturn in H2, reflecting some acceleration of restructuring activity
directly linked to achieving its cost outlook of c.€2bn in FY26 and FY27.
There has been no change to the Group's UK motor finance provision of £143m.
The Group anticipates further clarity on this matter in H2.

 

Balance Sheet

The Group's loan book was €82.2bn in June (Dec 24: €82.5bn) with strong
growth in Ireland of €1.3bn, driven by Irish mortgages, where the Group had
a 40% share of the new lending market. This was offset by FX impacts and
planned deleveraging of €0.8bn, primarily GB Corporate. The Irish loan
portfolios rose by 5% annualised in H1. The Group retains its guidance of c.2%
loan book growth for FY25, notwithstanding the FX impacts.

 

Our liquidity profile remains strong, supported by our retail franchise in
Ireland. Customer deposits were €105.0bn, €1.9bn higher than in December,
driven by higher Irish Everyday Banking balances. The flow to term in the
period was €1.1bn (H224: €1.9bn), in line with our expectations.

 

The Group's liquid assets were €45bn at June 2025 (Dec 24: €44bn),
supported by higher customer deposits, partially offset by higher lending
volumes and lower wholesale funding volumes. The Group completed a €0.6bn
AT1 securities issuance in March, at a reset spread of 363bps, the lowest ever
credit spread for an Irish bank AT1. The Group also raised €750m in a green
bond senior issuance in May.

 

At June 2025, the Group's liquidity coverage ratio was 194% (Dec 24: 198%),
the loan to deposit ratio was 78% (Dec 24: 80%), and the net stable funding
ratio was 154% (Dec 24: 155%).

 

Asset Quality

The Group's asset quality remains robust. The NPE ratio was 2.6% at end June,
up 40bps since December 2024, but down 30bps yoy and close to multi-year lows.
The Group continues to deploy organic and inorganic solutions to support NPE
reduction.

 

The Group reported a net credit impairment charge of €137m (33bps
annualised) in H1. This comprises a net portfolio activity charge of €97m
(23bps annualised), reflecting loan loss experience partly offset by credit
protection, and a €40m charge (10bps annualised) from additional management
adjustments incorporating the evolving macroeconomic outlook. Reflecting H125
performance, we have updated our FY25 impairment guidance to be c.30bps,
subject to no material change in economic conditions or outlook.

 

Capital

Our pro forma fully loaded CET1 capital ratio was 16.0%(3) at June 2025 (Dec
24, 14.6%). The Group's capital performance benefitted from strong net organic
capital generation of 110bps and 115bps benefit from Basel IV implementation,
partly offset by investment in RWA and a deduction for the interim ordinary
dividend. The interim dividend of 25 cents per share will be paid on 30
October 2025 to shareholders on the register on 3 October 2025, the record
date for the dividend.

 

RWAs at June 2025 of €52.2bn were lower than the €55.3bn at December 2024
reflecting investment in lending and CRT amortisation, which were more than
offset by the Basel IV benefit (c.€3.6bn).

 

2025 guidance summary

   ·         Adjusted ROTE of c.15%
   ·         Organic capital generation of 250-270bps
   ·         Net interest income of c.€3.3 billion
   ·         Business income2 c.5% higher yoy
   ·         Operating expenses c.3% higher yoy
   ·         Levies and regulatory charges of c.€130m
   ·         Impairment charge c.30bps, subject to no material change in economic
             conditions or outlook
   ·         Non-core costs in H2 to be broadly similar to H1
   ·         Distributions for 2025 to comprise a combination of a progressive ordinary
             dividend per share for the full year and share buybacks

 

Reiteration of medium-term outlook

The Group had previously provided a medium-term outlook to 2027. It reiterates
its expectation for adjusted RoTE to build to >17% by 2027, supporting
capital generation of 250-270 basis points each year. This outlook translates
into net capital generation over 2025-2027 equivalent to c.35%(4) of the 30
June 2025 market capitalisation, supporting a progressive DPS, with additional
surplus capital considered annually.

 

 

 (1) Annualised

 (2) Including share of JVs and associates

 (3) The Group's reported fully loaded CET1 ratio was 15.3%, reflecting the
 mechanical exclusion of H1 profits in accordance with EBA Q&A guidance.

 (4) Capital generated over 2025-27, including benefit from Basel IV
 implementation, less capital retained to support RWA growth; divided by market
 capitalisation of the Group at 30 June 2025.

 

Ends

 

The interim report is available at
https://investorrelations.bankofireland.com/results-centre/
(https://investorrelations.bankofireland.com/results-centre/)

 

For further information please contact:

 

Bank of Ireland

 

 Mark Spain, Group Chief Financial Officer                                +353 1 2508900 ext 43291
 Eamonn Hughes, Chief Sustainability & Investor Relations Officer         +353 (0)87 2026325
 Damien Garvey, Head of Group External Communications and Public Affairs  +353 (0)86 8314435

 

 

Forward Looking Statement

This announcement contains forward-looking statements with respect to certain
of Bank of Ireland Group plc (the 'Company' or 'BOIG plc') and its
subsidiaries' (collectively the 'Group' or 'BOIG plc Group') plans and its
current goals and expectations relating to its future financial condition and
performance, the markets in which it operates and its future capital
requirements. These forward-looking statements often can be identified by the
fact that they do not relate only to historical or current facts. Generally,
but not always, words such as 'may,' 'could,' 'should,' 'will,' 'expect,'
'intend,' 'estimate,' 'anticipate,' 'assume,' 'believe,' 'plan,' 'seek,'
'continue,' 'target,' 'goal,' 'would,' or their negative variations or similar
expressions identify forward-looking statements, but their absence does not
mean that a statement is not forward-looking.

 

Examples of forward-looking statements include, among others: statements
regarding the Group's near term and longer term future capital requirements
and ratios, loan to deposit ratios, expected impairment charges, the level of
the Group's assets, the Group's financial position, future income, business
strategy, projected costs, margins, future payment of dividends, future share
buybacks, the implementation of changes in respect of certain of the Group's
pension schemes, estimates of capital expenditures, discussions with Irish,
United Kingdom, European and other regulators, plans and objectives for future
operations, and the continued impact of regional conflicts on the above issues
and generally on the global and domestic economies. Such forward-looking
statements are inherently subject to risks and uncertainties, and hence actual
results may differ materially from those expressed or implied by such
forward-looking statements.

 

Such risks and uncertainties include, but are not limited to, those as set out
in the Risk Management Report in the Group's Annual Report for the year ended
31 December 2024 and in the 'Principal Risks and Uncertainties' section of its
2025 Interim Report.

 

Nothing in this announcement should be considered to be a forecast of future
profitability, dividend forecast or financial position of the Group and none
of the information in this document is or is intended to be a profit forecast,
dividend forecast, or profit estimate. Any forward-looking statement speaks
only as at the date it is made. The Group does not undertake to release
publicly any revision to these forward-looking statements to reflect events,
circumstances or unanticipated events occurring after the date hereof.

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