Bank of Ireland sees income boost after interest rate hike

The Bank of Ireland has reported an increase in net interest income following rate hikes since July.

The bank said net interest income was up 3 percentage points in the nine months to September compared to the same period last year.

This is now ahead of expectations as the bank is now raising its net interest income forecast for the year.

The Bank of Ireland now expects net interest income to increase by around 6-7 per cent year-on-year.

Net interest income in the first half of the year before the rate hikes was 1 percent lower compared to the first six months of 2021.

Business income is up 14 percent in the nine months to September. The bank attributed this performance to growth across all businesses, while Davy continued to attract net new money over the nine month period.

However, the bank indicated that overall funds under management and capital market activity had been impacted by external market conditions.

Net lending was €1.9 million in the Bank’s Retail Ireland and Corporate & Markets businesses for the first nine months of the year.

During that period, new loan originations increased by 13 percent compared to 2021 figures.

At the end of September, the customer loan volume was EUR 73.5 billion, EUR 2.8 billion lower than at the end of 2021.

Operating expenses excluding levies and regulatory charges were 1 percent lower year-over-year in the first nine months of 2022, excluding Davy and one-time investments following two banks’ withdrawal from the market.

Reported costs are 5 per cent higher over the same period as the group offers its employees a one-off cost of living payment.

The bank’s non-performing loans fell by €0.2 billion to €4.1 billion since the end of last year, accounting for 5.4% of gross loans. This was down from the 3.1 billion euros reported late last year.

As Ulster Bank and KBC prepare to exit the market, Bank of Ireland has opened 245,000 new current and deposit accounts year to date, a 90% increase from the same point in 2021.

Bank of Ireland’s acquisition of around €5 billion of KBC loans and debt is expected to be completed by the end of the first quarter of next year.

“The Irish economy has continued to perform well despite an increasingly uncertain environment and mounting inflationary pressures. We are very aware of the impact of higher inflation on our clients, which we will support even through a difficult winter,” said interim CEO Gavin Kelly.

“Business momentum is positive overall. We are raising our net interest income forecast for 2022 to reflect the interest rate outlook.” Bank of Ireland sees income boost after interest rate hike

Fry Electronics Team

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