Bank of Ireland Upgrades Net Interest Income Guidance After Strong Third Quarter
Bank of Ireland reported a 6% increase in total income for the first nine months of the year, driven by balance sheet growth and structural hedge benefits, according to an interim management statement. Total consumer loans rose by €3.6 billion to €86.1 billion, with Irish loans increasing by approximately 8% through strong mortgage activity and small business lending, the Irish Times reported.
The country’s biggest bank by assets upgraded its 2026 net interest income guidance for the second time this year, moving the forecast from about €3.5 billion to greater than €3.5 billion. Net interest income grew 4% year to date compared to the same period in 2025, supported by structural hedge benefits and overall balance sheet expansion.
Commercial Momentum and Balance Sheet Growth Across Sectors
Sustainable finance lending expanded to €20.7 billion, marking a 17% increase for the year. Customer deposits climbed 3% to reach €110.3 billion, while assets under management jumped 16% to €67 billion following a €1.5 billion increase during the third quarter. Total operating expenses rose 2% due to inflation and investment, which the bank offset through targeted efficiencies and slightly lower restructuring costs.
Asset quality remained resilient as the non-performing loan ratio dropped to 2% at the end of September, down from 2.2% at the close of last year. Myles O’Grady, the Bank of Ireland Group CEO, noted that the bank was delivering against all priorities and targets with real momentum three quarters into the first year of its new strategic cycle. This is reflected in continued growth in loans, deposits and wealth assets under management, supporting income growth and strong capital generation, whilst asset quality remains resilient,
O’Grady said.
Economic Forecasts and Technological Investments
Reflecting confidence in domestic economic indicators, Bank of Ireland revised its modified domestic demand growth forecasts for 2026 upward from 2.7% to 3.9%, with next year’s forecast rising from 2.4% to 2.8%. Consumer inflation is projected to average 3.5% and 3.2% in 2026 and 2027, respectively, while employment growth is expected to be 1% this year and 2% next year according to The Irish Times.
The bank is also pushing ahead with digital initiatives. O’Grady highlighted the rollout of a new mobile application and progress on a financial planning platform designed to support the firm’s wealth and insurance strategy.
Financial Targets and Strategic Outlook Out to 2028
Bank of Ireland remains on track for its 2028 financial targets, including a statutory return on tangible equity expected to be more than 14% this year and rise above 16% by 2028. The lender remains on track to deliver earnings growth into 2027 and beyond despite prevailing geopolitical developments.
| Metric | Current Figure | Change / Comparison |
|---|---|---|
| Net Loans | €86.1 billion | Up 5% total (€3.6B increase) |
| Customer Deposits | €110.3 billion | Up 3% |
| Assets Under Management | €67 billion | Up 16% |
| Sustainable Finance Lending | €20.7 billion | Up 17% |
| Non-Performing Loan Ratio | 2% | Down from 2.2% |
Questions Regarding Future Product Offerings and Market Positioning
What new customer offerings is the bank preparing for future rollout?
Bank of Ireland intends to leverage the Irish Government’s Individual Investment Account announcement to bring innovative propositions to customers in 2027.
How are operational costs being managed amid inflationary pressures?
Operating expenses rose 2% due to inflation and investment, but the bank successfully offset these cost increases through targeted efficiencies and slightly lower restructuring costs.
What specific guidance figures did the bank adjust for 2026?
The bank upgraded its net interest income guidance for the second time this year to greater than €3.5 billion, alongside anticipating a statutory return on tangible equity of more than 14% this year.
Shares in the bank moved higher in Dublin trade today.
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